Ex-CBN Chief Drags SEC, Broker To Court Over Stock-Market Scandal

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A retired Manager with the Central Bank of Nigeria (CBN), Mr Boniface Onwubualiri has dragged the Security and Exchange Commission (SEC), and the City Securities Ltd, an Enugu-based stock-broking firm to the Industrial Arbitration Court (IAC) over acquisition of some blue-chip stocks.

The legal action according to the former CBN chief in his respective pre-action notices dated Feb 4, 2013, to both SEC and broker, receipts of both were acknowledged had become necessary following series of alleged tripartite fruitless meetings meant to resolve the disagreement amicably.


Onwubualiri told the reporters at the office of the Onitsha office of SEC where he admitted he was summoned apparently after the receipt of his pre-action notice, that vide an email dated Feb 28, 2008, which was repeated few days after, had detailed the broker to purchase certain listed stocks for him at the ruling rate then. He confirmed he had consequently sent a total sum of Eight hundred and forty thousand naira to the broking firm, made in three installments, through FCMB bank Plc, Enugu.

He also specified preference for 300, 000 Juli Pharmacy Plc stocks as well as 300, 000 stocks of Rocana Industries complications, while the remainder should be used to buy other equally listed named stocks.

But unfortunately the broker did not follow his instructions or buy the stocks at the time. He alleged they withheld his funds and when he raised objections and concern on their mode of operations, they went to purchase some other stocks outside his brief.

When he could no longer bear the alleged antics, he petitioned the SEC which after a long and tortuous detailed investigation led by its South East(Onitsha) Zonal Head, Mr B.E.Archibong vide letters of Dec 7, 2011, Feb 2, 2012 and March 19, 2012 directed the broker to refund five hundred and forty thousand (N540, 000) with an interest of 12.2% from Feb 2008 to Dec 2011 to Mr Onwubualiri. SEC also directed that, “…you are directed to forward a compliance report to reach the Commission on or before Feb 16, 2012.”

But CSL in a letter by Imade George-Ogbonna who is incharge of its Risk Management, Control and Compliance to SEC dated March 22, 2012 refered to a pending appeal they filed against their earlier directive for refund of N540,000 to Mr Onwubualiri, before the Commission’s Director General. Repeated attempts to get their further comments were repeatedly rejected.

SEC had insisted that only compliance of its earlier order would avail the broker opportunity to make further representation on the issue, as a way to restore investors’ confidence in them/ the market.

The petitioner stated that surprisingly none of these directives were complied with and SEC has so far taken no further action to assist him recover his money. Almost coming to tears, Mr Onwubualiri told reporters that the transaction has crippled his financial base and means of sustenance, hence the legal action which he described as his last resort.

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