Thursday, 28 May

SEC collapses Nduom's Gold Coast, 52 other fund managers

Gold Coast

The Securities and Exchange Commission (SEC) has withdrawn the licences of 53 Fund Management Companies.

The regulatory body took the action on Friday, 8 November 2019 as it stated that the firms cease to operate immediately. 

“The revocation of the licences of the specified companies has become necessary as they have largely failed to return client funds which remain locked up and in a number of cases, they have even folded up their operations,” the regulator said in a statement.

These actions were taken pursuant to Section 122 (2) (b) of the Securities Industry Act, 2016 (Act 929 or “the Act”) which authorises the Securities and Exchange Commission to revoke the licence of a market operator under certain conditions.

SEC explained that the firms “have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches”.

SEC said it “has concluded after extensive engagement with these institutions that their continuous existence in the light of their conduct poses severe risks to the stability of the capital market and to the interests of investors”.

The statement added that: “SEC has taken this action in accordance with its mandate of protecting investors and the integrity of the capital market. The SEC and its authorised agents will secure the premises of the affected companies for further investigations under section 26 of the Act. In addition, the SEC has notified the Registrar of Companies of the revocation of these licenses and has requested that the Registrar petitions the High Court to commence winding-up proceedings against these companies under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180)”.

The releases also said that SEC and the Liquidator, once appointed will work together with the government to pay a capped amount to all affected investors of these firms in line with government commitment to support the securities industry and to provide some immediate relief to investors who are hurting because of their locked-up funds. The outcome of the court process will inform the handling of assets retrieval and liquidation to further sort out validated investor claims.

“By the close of business on Monday the 11th of November 2019, SEC, together with its authorised agent, will provide further details about the validation process and specific locations where investors can present their claims to be validated. In the interim we urge all investors to remain calm, gather all receipts, statements and any other documentation related to their investment with the affected institutions. There is also no need for any panic withdrawals on the firms whose licences are intact and not on the revocation list,” the release stated.

See full list of firms below: