Revisiting the Concept of Insider Dealing Under Nigerian Law: Any New Lessons from Other Jurisdictions?

Abstract

The article posits that the regulation of insider dealing will continue to throw up a host of issues. For one, the sophistication of the financial environment within which the law and regulatory mechanisms operate, compounds the practical and legal difficulties confronting those seeking to administer and apply the law. The article proceeds to argue that the taking of advantage of information that the other party could not obtain, is as old as human nature and that man is naturally structured to think of protecting his interest first. Consequently, the article asserts that the problem of insiders abusing information that they obtain by virtue of the special relationship that they have with the company is not a new one. Nonetheless, while some do not see any reason why insiders who deal in the securities of the issuer with which they enjoy this privileged access to its information should not be held responsible, others hold the view that acquisition of superior information should not be discouraged, let alone be penalised. It is against this backdrop that the article critically examines the concept of insider dealing under the Nigerian law; the mischief the law seeks to remedy; and considers relevant lessons from other jurisdictions.

Keywords: Insider Dealing, Insider Trading, Misappropriation theory, Code of Corporate Governance, NSE Rules, SEC Rules, Criminal penalties, civil penalties