ACHIEVING AN EFFECTIVE INSIDER TRADING REGULATION IN NIGERIA- A

REVISIT.
By Ifeoluwa Etomilade-Oduola.
Insider trading, no doubt is an economic problem ravaging the Nigerian market. It is
therefore not surprising that the banking sector had to go through the process of mergers and
acquisition mandated by the Central Bank of Nigeria as corrective measures. Insider trading
coupled with weak corporate governance was cited as the major factor crippling the securities of
these sector. A critical appraisal of the laws prohibiting insider trading showed that not only
have they been ineffective, the regulators have not successfully prosecuted insiders within the
banking sector for insider trading. The laws regulating insider trading can thus be said to bedevil
with many problems hindering the regulators from performing the responsibilities effectively and
the economy from growing at the pace it ought to.
Against this backdrop, this paper examines the history of insider trading in the countries
being understudied. The paper proceeds to consider the problem of insider trading in Nigeria
with particular emphasis on the financial crisis within the financial market and its effect on the
economy. Having identified that the enabling laws have so far been ineffective, a critique of
these laws and mechanisms would be done in order to expose its strength and weaknesses, with
the aim of finding a solution to the problem of insider trading in Nigeria.
Against this backdrop, this paper examines the history of insider trading, especially from
the Nigerian perspective. The paper then proceeds to consider the problem of insider trading in
Nigeria with particular emphasis on the financial crisis within the financial market and its effect
on the economy. Having identified that the enabling laws has so far been ineffective, a critique of
these laws and mechanisms would be done in order to expose its strength and weaknesses, with
the aim of finding a solution to the problem of insider trading in Nigeria. In proffering solutions
to the problem of insider trading in Nigeria, this paper will examine the regulation of insider
trading in some developed jurisdictions like United States and United Kingdom, with the aim of
knowing how they have regulated insider trading, how they have been able to successfully
prosecute insiders and the lessons Nigeria can learn from these achievements. In doing so the
author made a comparative study of the applicable laws in Nigeria with that of the countries of
study. It looks at the regulatory regimes in the US and UK as developed countries in order to
consider how these foreign provisions can be successfully transplanted to Nigeria.
Based on the discus, this paper recommends a review of the existing laws regulating
insider trading to include more stringent provisions. The regulators need to forge closer
relationship with other agencies fighting against financial crimes. The scope of power of the
regulators needs to be expanded in order to remove any limitation to performing their duties. The
agencies in charge of the Nigeria Stock Market also need to be adequately funded to avoid
compromise on the part of its staffs. .