The Investments and Securities Tribunal (IST) sitting in Abuja
has awarded N3 million damages to an investor in the capital market
over the losses and hardship he incurred as a result of his
stockbroker’s misconduct.
Delivering judgment in a case instituted by Maj-General Steven
Guar (rtd.) against Meristem Securities Limited and Securities and
Exchange Commission (SEC) as defendants/respondents at the weekend,
the tribunal ruled that the preponderance of evidence before it
showed that Meristem Securities Limited failed to discharge the
duty of care required of it to the investor who is its client.
Guar had sued the company claiming N30 million as general
damages and N25 million as special damages to compensate for the
loss of share certificates he deposited with the company for
verification and dematerialisation in 2008 but which the company
claimed to have lost without informing him of the loss until 2014.
He said it was only in 2014 that he read about the loss from the
company’s reply to a regulatory query from the Securities and
Exchange Commission where they claimed his share certificates were
lost in transit between their Kaduna and Lagos offices.
The applicant also complained that Meristem Securities Limited
failed to account for the whereabouts of another 50,000 units of
Access Bank Plc shares he bought through it in an Initial Public
Offer (IPO) in 2004.
According to the particulars of the case, Guar sometime in 2004
bought 50,000 units of Access Bank Plc shares through Meristem
Securities Limited and gave his office address as Jos, Plateau
State. From that time, he did not hear anything again about the
shares allocation/allotment nor was a share certificate delivered
to him until 2012 when he accidentally received a dividend bonus
certificate issued on the shares in 2008. He, thereafter, made
inquiries and got to know that his address on the shares
subscription form was changed to another address in Ikoyi, Lagos.
The address in Lagos belonging to the company was where his
dividends, bonuses and letters were channelled. He demanded from
the company the original certificate of the shares as well as the
other bonuses and dividends that had accrued which they failed to
oblige.
Also, in 2008, the applicant in another separate transaction
travelled to the Kaduna Office branch of the company and handed
them various share certificates of different companies in which he
held shares to take to the Central Securities Clearing System
(CSCS) in Lagos to verify, dematerialise and credit into his
account only for the company to fail to account for the whereabouts
of those other share certificates.
Guar, after failing to resolve the issues even with the
intervention of SEC, approached the Tribunal seeking eight
declarative remedies including an order that he was entitled to
know the whereabouts of his share certificates; that the
certificates be returned to him and that the withholding of
dividends accrued from his 50,000 units of shares till date was
illegal.
He also sought an order to compel SEC to direct Meristem
Securities to regularise documentation of his shares with his
Registrar and consolidate his accrued dividends, bonuses and
interests, among others.
On their part, Meristem Securities Limited told the Tribunal
that the share certificates were lost in transit between their
Kaduna and Lagos offices. On the entry of a wrong address in his
offer application form and incorrect routing of his letters to
their Lagos office which kept him in the shadows, the company
denied responsibility arguing that Registrars were responsible for
custody of addresses and dispatch of mails.
Meristem also argued that though the certificates were lost, the
client’s shares were still intact. However, the client proved
before the Tribunal how the value of the shares eroded drastically
during the market tumble that took place.
However, the Tribunal, presided by Honourable member, Jude Ike
Udunni, said it was inclined to award general damages against the
1st defendant because the applicant suffered some losses and
hardship as a result of the conduct of the company. It further
ordered the company to take immediate steps to ensure that all
shares, dividends, and bonuses accrued and still outstanding to the
applicant be credited to his CSCS account.
Other members of the Tribunal on the panel are – Abubakar A.
Ahmad, Albert L. Otesile, Emeka C. Madubuike and Kasumi G.
Kurfi.
The Securities and Exchange Commission being the second
defendant was not found wanting in its handling of the matter when
it was reported to it.
The Investments and Securities Tribunal (IST) sitting in Abuja
has awarded N3 million damages to an investor in the capital market
over the losses and hardship he incurred as a result of his
stockbroker’s misconduct.
Delivering judgment in a case instituted by Maj-General Steven
Guar (rtd.) against Meristem Securities Limited and Securities and
Exchange Commission (SEC) as defendants/respondents at the weekend,
the tribunal ruled that the preponderance of evidence before it
showed that Meristem Securities Limited failed to discharge the
duty of care required of it to the investor who is its client.
Guar had sued the company claiming N30 million as general
damages and N25 million as special damages to compensate for the
loss of share certificates he deposited with the company for
verification and dematerialisation in 2008 but which the company
claimed to have lost without informing him of the loss until 2014.
He said it was only in 2014 that he read about the loss from the
company’s reply to a regulatory query from the Securities and
Exchange Commission where they claimed his share certificates were
lost in transit between their Kaduna and Lagos offices.
The applicant also complained that Meristem Securities Limited
failed to account for the whereabouts of another 50,000 units of
Access Bank Plc shares he bought through it in an Initial Public
Offer (IPO) in 2004.
According to the particulars of the case, Guar sometime in 2004
bought 50,000 units of Access Bank Plc shares through Meristem
Securities Limited and gave his office address as Jos, Plateau
State. From that time, he did not hear anything again about the
shares allocation/allotment nor was a share certificate delivered
to him until 2012 when he accidentally received a dividend bonus
certificate issued on the shares in 2008. He, thereafter, made
inquiries and got to know that his address on the shares
subscription form was changed to another address in Ikoyi, Lagos.
The address in Lagos belonging to the company was where his
dividends, bonuses and letters were channelled. He demanded from
the company the original certificate of the shares as well as the
other bonuses and dividends that had accrued which they failed to
oblige.
Also, in 2008, the applicant in another separate transaction
travelled to the Kaduna Office branch of the company and handed
them various share certificates of different companies in which he
held shares to take to the Central Securities Clearing System
(CSCS) in Lagos to verify, dematerialise and credit into his
account only for the company to fail to account for the whereabouts
of those other share certificates.
Guar, after failing to resolve the issues even with the
intervention of SEC, approached the Tribunal seeking eight
declarative remedies including an order that he was entitled to
know the whereabouts of his share certificates; that the
certificates be returned to him and that the withholding of
dividends accrued from his 50,000 units of shares till date was
illegal.
He also sought an order to compel SEC to direct Meristem
Securities to regularise documentation of his shares with his
Registrar and consolidate his accrued dividends, bonuses and
interests, among others.
On their part, Meristem Securities Limited told the Tribunal
that the share certificates were lost in transit between their
Kaduna and Lagos offices. On the entry of a wrong address in his
offer application form and incorrect routing of his letters to
their Lagos office which kept him in the shadows, the company
denied responsibility arguing that Registrars were responsible for
custody of addresses and dispatch of mails.
Meristem also argued that though the certificates were lost, the
client’s shares were still intact. However, the client proved
before the Tribunal how the value of the shares eroded drastically
during the market tumble that took place.
However, the Tribunal, presided by Honourable member, Jude Ike
Udunni, said it was inclined to award general damages against the
1st defendant because the applicant suffered some losses and
hardship as a result of the conduct of the company. It further
ordered the company to take immediate steps to ensure that all
shares, dividends, and bonuses accrued and still outstanding to the
applicant be credited to his CSCS account.
Other members of the Tribunal on the panel are – Abubakar A.
Ahmad, Albert L. Otesile, Emeka C. Madubuike and Kasumi G.
Kurfi.
The Securities and Exchange Commission being the second
defendant was not found wanting in its handling of the matter when
it was reported to it.
Read more https://nairalaw.com/tribunal-awards-investor-n3m-damages-over-stockbrokers-negligence/