Court Convicts Three Firms For Illegal Capital Market Operations
Justice D.I. Dipeolu of the Federal High Court in Ikoyi, Lagos, has found two companies, FARM360 Limited and MCBHADMOS Trans-Atlantic Trade Limited, guilty of engaging in unauthorized capital market activities. The Economic and Financial Crimes Commission (EFCC) revealed that the Lagos Zonal Directorate 2 of the EFCC brought the companies to court on June 16, facing a five-count charge for running collective investment schemes without valid licences from either the Central Bank of Nigeria (CBN) or the Securities and Exchange Commission (SEC).
The charges claim that between 2021 and 2022, the companies amassed approximately N80 million from various investors but failed to return the funds or pay the promised interest. One count specifically noted that the companies operated without a valid licence to conduct investment management, breaching Section 57 of the Banks and Other Financial Institutions Act 2020.
Despite pleading not guilty, EFCC investigator Nnadikwu Izuchukwu Collins provided evidence, including a petition from investors who stated the firms promised high returns through agricultural and forex trading investments. The petition disclosed that the group collectively invested N93 million.
Investigations confirmed that neither FARM360 nor MCBHADMOS possessed the required licences from the SEC or CBN. A Fidelity Bank statement showed that the N80 million collected was diverted for personal use. The directors of both companies are still at large, with ongoing efforts to apprehend them.
The prosecution presented bank statements, the investor petition, and official correspondence with the CAC, CBN, and SEC as evidence, all of which were accepted by Justice Dipeolu.
The court found both companies guilty on all counts and imposed fines of N5 million per count.
In a related matter, the court also convicted Quintessential Investment Company Limited for similar unauthorized capital market activities, following its arraignment on two counts of operating collective investment schemes without CBN approval.
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Nnamdi Okoli
