Licenses of troubled investment firms could be withdrawn if... – SEC

Source: Ghana|Myjoyonline.com | JoyBusiness | AI
Date: 15th-may-2018 Time:  11:31:52 am

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The Security and Exchange Commission (SEC) has indicated its preparedness to withdraw licenses of the troubled investment firms if it is established that they failed to comply with the required industry laws.

Deputy Director General of the Commission, Paul Ababio told JoyBusiness they need to exhaust all the necessary processes before any action can be taken.

This notwithstanding, Mr Ababio maintains everything would be done in protecting the interest of the investing public.

“We are exploring all the options available to us as at this point; one to ensure a resolution of these issues, and also to protect investors’ interest in the long run as well. So we are doing our best to manage the situation,” he said.

Last week, SEC announced that it has put 10 investment firms under investigations over breaches of the investment laws and complaints from the investing public. 

Refund of depositors’ investments in limbo

Meanwhile, the Commission has indicated that there is little it can do with regards to refunding depositors funds with the troubled investment firms.

According to the Commission, it might be difficult for it to offer any bail-out since most of the said firms took on these funds without the approval of the regulator.

Mr Ababio added that “in the capital market, you take a risk, for instance, if you invest in the stock market and the company goes bankrupt, you could possibly lose your shares.

"There’s the possibility of loss because in the instance of these investments, one is the ability to pay, and two is the rate of return.”

State of the capital market

The announcement by the Securities and Exchange Commission has brought to the fore arguments that the sector is in deep financial crisis with a lot more firms set to go down due to what some people have described as a serious liquidity crisis.

But Mr Ababio told JoyBusiness these are isolated cases and his outfit is working to fully deal with all the issues in the sector to help restore investor confidence.  

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