Insider Trading in Developing Jurisdictions by Wunmi Bewaji

Author:Wunmi Bewaji
Language: eng
Format: epub
ISBN: 9781136295386
Publisher: Taylor & Francis Group

5A critical expedition into the Kingdom of Nigeria's insider dealers

5. 1 Introduction and background

5.1.1 Reason for the study

In Chapter 4; we examined the Nigeria law on insider dealing as contained in the provisions of the Investments and Securities Act 2007. The dearth of academic literature on the subject coupled with the absence of any reported cases and the need to establish what is happening in the corporate world in Nigeria make the undertaking of a fieldwork necessary to empirically ascertain the existence, prevalence as well as the understanding of insider dealing in Nigeria. Such a study will also expose us to the profile of the Nigerian insider as well his antics and tactics. That is what this chapter seeks to do in consonance with the aims of the research.

One can safely say that all evidence presented about the need for the regulation of insider dealing or non-regulation thereof and other consequential matters have being based upon empirical studies conducted on the developed economies while little or no work has been done on the emerging markets from the developing jurisdictions. This is particularly so in relation to Africa which has very a different historical, political, economic, cultural and social background. This is not ideal in the new era of globalization facilitated by the computer and information technology allowing a round-the-clock trading without borders. The study, therefore, seeks to add the experiences of the most populous country in Africa and the second largest economy on the continent, ie Nigeria to the existing body of studies on the subject of insider dealing. The study will therefore seek to investigate the possible existence and verify the extent of insider dealing in Nigeria. The study will also examine the understanding of insider dealing by parties integral to its violation and administration, ie the public, the investors, stockbrokers and other market participants, the journalists, the self-regulatory organizations and the regulators.

This study will examine whether or not local peculiarities and conditions like level of education, ignorance, infrastructure and institutions have any role or impact on insider dealing regulation, practice and enforcement. The aforementioned key questions are investigated in this empirical study with a view to finding basic answers to them while illuminating the way for further work on the subject.

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