Protecting Nigerian Investors A Case Review - Case: AJAYI V. SECURITIES AND EXCHANGE COMMISSION (2009) 13 NWLR (Pt. 1157) 1 Reviewer: Olumide K. Obayemi This paper critiques the slow pace and use of legal rigmaroles in frustrating enforcement investors’ protection laws in Nigeria, compared with the American legal system, using Ajayi v SEC as reference. It concludes that (a) Nigerian courts should employ their power to sanction lawyers and litigants more proactively; (b) specialized courts’ powers, such as the Investment and Securities Tribunal (IST) must be enhanced to handle specific subject- matters in Nigeria; and (c) the rights of appeal to appellate courts may be curtailed/ restricted to matters involving meritorious issues. This will facilitate quick and expeditious resolution of disputes between litigants. It is disheartening that, after eleven years, issues raised in Ajayi v SEC are nowhere near resolution while the impugned corporate officers and auditors (Osindero, Oni & Lasebikan) parade the Nigerian Capital Market, whereas the 2001 Enron Scandal, in the United States, had been put to rest with Enron’s executives and Arthur Andersen becoming historical relics. THE ENRON SCANDAL The October 2001 Enron Scandal, led to the bankruptcy of Enron, and dissolution of Arthur Andersen, the world’s largest audit and accountancy partnership. Enron’s Jeffrey Skilling and other executives used accounting loopholes, special purpose entities, and poor financial reporting, to hide billions in debts from failed deals and projects. Chief Financial Officer Andrew Fastow and others misled Enron’s board of directors and audit committee of high-risk accounting issues and pressured Andersen to ignore the issues. Enron’s stock price hit US$90 per share in mid-2000, later caused shareholders to lose $11 billion by plummeting to less than $1 by December 2001. U.S. SEC’s investigations indicated Enron executives. On May 25, 2006, Lay and Skilling were convicted amongst others, of securities and were fired. Earlier, on May 6, 2002, a charge of obstructing an official proceeding of the SEC was filed against Enron’s auditor, Arthur Andersen LLP. The jury found Andersen guilty on June 15, 2002, of obstructing of justice. Since federal regulations do not allow convicted felons to audit public companies, Andersen surrendered his CPA license on august 31-effectively putting the firm out of business, losing majority of its customers and shutting down. The question is what makes the American system work quickly towards restoring investor’s confidence while the Nigerian investor is caught in endless delay?
Posted on: Thu, 18 Jul 2013 11:28:47 +0000
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