THE NEW REGIME AGAINST INSIDER TRADING AND THE INTERNATIONALISATION OF THE NIGERIAN CAPITAL MARKET

Until recently, the subject of insider trading scarcely aroused any interest in Nigeria, both in academic and business circles. One reason fo, this may have been the relative under-development of the capital marke, Very few companies traded their securities on ‘the Stock Exchange. By March, 1994, less than 200 of the over 200,000 companies registered in Nigeria were quoted on the ‘stock market.' In fact most Nigerian companies to date are private companies whose shares are not freely transferable for or marketable. This however does not imply that the opportunities for insider trading have been non-existent, in Nigeria. Surely, directors and other insiders. in any type of company could take advantage of confidential corporation information not available to external or non-managerial investors to trade in. their companies’ securities to the detriment of the latter.. By reason of their position, insiders within a company may acquire information that when made public, will affect the value of the company’s securities. Because of the delay between the time that such information is available to such an insider and the time that it becomes public, an insider familiar with the ultimate market impact of the information may trade advantageously to realise profits, usually by buying from existing investors and selling to potential investors.