Court Fines Two Firms N25m For Capital Market Infractions

Justice D.I. Dipeolu of the Federal High Court in Ikoyi, Lagos, has fined two companies, FARM360 Limited and MCBHADMOS Trans-Atlantic Trade Limited, a total sum of N25m for engaging in illegal capital market operations.

The firms were arraigned by the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC) on a five-count charge of operating unlicensed collective investment schemes in violation of the Banks and Other Financial Institutions Act, 2020.

The EFCC told the court that the companies collected N80m from various investors between 2021 and 2022, under the false pretence of investing in agriculture and forex trading. However, the firms failed to refund the investments or pay the promised returns.

One of the charges read: “That you, FARM360 LIMITED and MCBHADMOS TRANS-ATLANTIC TRADE LIMITED, sometime between 2021 and 2022 in Nigeria, within the Judicial Division of this Honourable Court, being companies incorporated in Nigeria, failed to obtain a valid licence from the Central Bank of Nigeria to carry on your business of investment management and you thereby committed an offence contrary to Section 57 of the Banks and Other Financial Institutions Act 2020 and punishable under Section 57(5) of the same Act.”

Though a not-guilty plea was entered on their behalf, the prosecution presented compelling evidence through EFCC investigator, Nnadikwu Izuchukwu Collins. He told the court that the Commission received a petition in October 2022 from a group of investors who claimed they were lured with “mouth-watering” returns.

Collins testified that the EFCC’s investigation revealed that the two companies were not licensed by the Central Bank of Nigeria or the Securities and Exchange Commission to operate investment or forex trading schemes. He also disclosed that Fidelity Bank records showed the N80m raised was diverted for personal use.

Justice Dipeolu, after reviewing the evidence, including documents from the EFCC, SEC, CBN, and bank statements, found both companies guilty and imposed a fine of N5m on each count, totalling N25m.

The directors of both firms remain at large as efforts to apprehend them continue.