SECURITIES & EXCHANGE COMMISSION V. PROF. A. B. KASUNMU (2008)

Background

This case originates from a dispute between the Securities & Exchange Commission (hereafter referred to as 'the Commission') and Prof. A. B. Kasunmu, who served as an external solicitor to the Chartered Bank of Nigeria Plc. The disagreement centered around the Commission's regulation mandating that all solicitors participating in capital market transactions must be accredited and registered with the Commission. In 2001, the Chartered Bank sought to raise funds through public share offerings, and the Commission informed the bank that only registered solicitors could participate. Prof. Kasunmu contested this requirement, arguing it lacked statutory backing, leading to legal proceedings.

Issues

The Court deliberated on several key issues, including:

1. whether the trial Judge was correct in ruling that the 1st respondent was excluded from the definition of “capital market intermediaries” under the Investment and Securities Act (ISA);
2. whether the court correctly interpreted the ejusdem generis rule and other statutory interpretation principles concerning legal practitioners;
3. whether the Commission possessed the power to issue regulations that conflict with the ISA;
4. whether Prof. Kasunmu required registration under the ISA to participate in capital market transactions;
5. whether the Federal High Court had jurisdiction over the matter considering the provisions of the 1999 Constitution and the establishment of the Investment and Securities Tribunal.

Ratio Decidendi

The Court held that:

1. Prof. Kasunmu was not included under the act's definition of intermediaries.
2. The Commission’s regulation requiring solicitors to be accredited violated the Investment and Securities Act.
3. Legal practitioners were excluded from the application of certain sections of the ISA regarding registration requirements.
4. The jurisdiction of the Federal High Court was not capable of being ousted by the provisions of the ISA.

Court Findings

The ruling concluded that:

1. The trial Judge correctly identified that the Federal High Court maintained jurisdiction to entertain disputes related to administrative decisions made by federal agencies.
2. The legal practitioner’s role was distinct from that of market intermediaries who buy and sell securities, thus exempting them from registration with the Commission.
3. The provisions of the ISA are subordinate to the constitution, which remains the supreme law.

Conclusion

The appeal was dismissed, affirming the lower court's decision that the Commission’s regulation requiring accreditation and registration for solicitors was inapplicable. Prof. Kasunmu was vindicated, allowing him to carry out his duties without the certification imposed by the Commission.

Significance

This case underscores the supremacy of the Constitution over statutory regulations and reinforces the distinct roles of legal practitioners in capital market operations. It serves as a pivotal precedent reaffirming judicial authority in administrative matters affecting professional practice within the securities industry in Nigeria.