SEC Vs HOUSE: Probe Must Go On



The allegations of abuse of office and corruption levelled against Ms. Arunma Oteh, the Director General of the Securities and Exchange Commission, SEC, and Herman Hembe, the immediate past Chairman of the House of Representatives Committee probing alleged fraudulent activities at SEC that led to the collapse of the capital market in 2008 and 2009, have again exposed the monumental corruption associated with government functionaries and our gluttonous elected officials.

The probe must proceed unhindered even as allegations levelled against Oteh and Hembe are investigated by the Economic and Financial Crimes Commission, EFCC, and other relevant government agencies.

The Committee had alleged during the House of Representatives hearing that in about eight months, Oteh spent over N30 million as hotel bills and feeding when she lodged at Transcorp Hilton Hotel in Abuja after her appointment as SEC DG.

Oteh in return accused Hembe of demanding N39 million bribe from SEC to give her a soft landing at the hearing.

She also accused Hembe of collecting N5 million estacodes from SEC to attend a course abroad but neither attended the course nor returned the money.

Although these allegations and counter allegations must be investigated, we believe that the SEC’s probe over what led to the collapse of the country’s capital market and robbed millions of Nigerians of their hard earned incomes is more important and must proceed unhindered.

SEC, chartered by the Investments and Securities Act No 45 of 1999, is the main regulatory institution of the capital market.

Its primary responsibility is to enforce the federal securities laws and regulate the capital market. The SEC was given the power to license and regulate stock exchanges, the companies whose securities traded on them and the brokers and dealers who conducted the trading.

In summary, SEC’s mandate is to ensure orderly and equitable dealings in securities, and the protection of the market against insider trading abuses.

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But after the collapse of the Nigerian capital market, a cornucopia of allegations and accusations were levelled against SEC. It was alleged that officials at SEC and the Nigerian Stock Exchange, NSE, looked the other way while insider trading abuses were rampant.

As a result, the stock market ran on deceit and eventually collapsed, robbing millions of Nigerians of their life-saving incomes which they had invested in the stock market with the trust that those regulating the activities of the market were honest and reliable people and were providing them with true information.

But as it turned out, the information provided to Nigerians was fake and unreliable and the market was poorly regulated with some officials accepting bribes and looking the other way.

In the end, billions of naira were lost by corporate bodies and ordinary people when the market crashed.

Since then, several attempts at probing SEC and its officials have hit the rocks.

This probe is an opportunity to punish those who did wrong and strengthen SEC to avoid what led to the crash of the market.

It is also important because Nigerians deserve to know the truth about why millions of them were rendered poor overnight with many others still recovering or repaying debts they incurred during the market boom.

We welcome the decision of the House of Representatives to appoint a new committee while all these allegations are investigated. We also urge the new committee to do a thorough job and tell Nigerians the truth about the stock market collapse so that appropriate sanctions and regulations can be taken.

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