PRIVATE PLACEMENTS? YOU ARE ON YOUR OWN, SAYS SEC NIGERIA.

If you as an investor decides to invest in any private placement by any private company in Nigeria, you are on your own.

According to the Securities and Exchange Commission (SEC) of Nigeria, this is because the commission is not empowered to regulate private placements by private companies.

This view was projected in a current post on SEC Nigeria website following complaints against a registered capital market operator, AIMS Asset Management ltd over private placement for two private companies.

The two private companies were Petdrill Development Company ltd and Aims Assurance company ltd.

"The commission" said SEC Nigeria "while investigating the activities of AIMS Asset Management ltd ( a registered capital market operator) observed that the private placements and the securities of the private companies were not under the regulatory purview of the commission"

In view of this, it added "the general public is hereby INFORMED that the commission does not regulate private placements by private companies and therefore the respective investors are advised to contact the said companies for their share certificates"

Private limited liability companies are known as private companies and can only get friends and well wishers to invest in them through private contacts and private offer of shares. The public can not be invited to invest in them publicly neither can their securities be traded publicly.

So really investing in them is a private affair but what is not clear is what happens if an investor decides to invest because the shares were marketed by a reputable and officially registered capital market operator?

Can such an operator be reported to SEC Nigeria for any unprofessional marketing tactics or conduct?

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