SECURITIES TRADING AND INVESTOR PROTECTION IN NIGERIA: AN ASSESSMENT OF THE CURRENT REGIME

The most important distinguishing feature of a Public Company is the fact that it can offer its shares or debentures to the public generally for subscription or purchase. A Private Company on the other hand is prohibited from soliciting investment by a public issue of securities. Infact even the transferability of its shares has to be restricted in the articles. The power to raise capital from public solicitation is what makes public companies comparatively more ambitious enterprises. But it also raises some important problems of investor and public protection against frauds or deception. Thus in order to protect investors and the public, the law imposes strict controls over invitations to the public to subscribe or purchase securities. The main form of control in this area is the requirements for the disclosure and publicity of company information which would enable investors and the public to intelligently assess the risk of the investment or the merits of the offer.