Enforcement of Insider Trading Regulations: Comparative Analysis of Nigeria and Australia

Abstract

Insider trading remained a problem in the Nigerian Stock markets. The recent probe of the collapse of the Nigerian capital market by the National Assembly of Nigeria has helped to identify Insider trading as being amongst the major causes of the near collapse of Nigeria's equity capital market. Despite the effortsbeing made by Nigeria's authority to combat the menace through regulations, enforcement has been identified as one of the major impediments to effective enforcement of insider trading regulations in Nigeria. This paper will primarily address the issue of enforcement of insider trading regulation in Nigeria. By way of comparison the paper will frequently refer to the Australian experience because Australiais one of the few countries in the world that has stringent insider trading law and stronger enforcement. The successful track record of the Australian regulatory
framework therefore demands a comparative analysis. This is done with a view to investigating lessons that might be learnt or adopted from Australia. The research is anchored on primary and secondary source materials. The study contends that having the
best insider trading laws on paper alone will not cure the insider trading problem. What is required is the effective enforcement of the laws in Nigeria.