Date of Award

Spring 2011

Degree Type


Degree Name

Doctor of Law (SJD)



First Advisor

Christian N. Okeke

Second Advisor

Sophie Clavier

Third Advisor

Timothy A. Simon


The crash of Nigeria stock market which occurred between 2008 and 2009 was unusual. Events that preceded the crash, misconducts of market operators and regulators before, during, and after the crash, the reckless hypes and spins that generated lots of frenzied trading leading to the astronomical rise of Nigeria stock market to number one position in the world, and the synchronization and magnitude of the crash that followed - all exhibit signs of organized scheme.

Thanks to the English Bubble Act of 1720 with which South Sea Corporation precipitated a one hundred and five years securities fraud in Britain, the infamous John Law's Mississippi South Pacific Corporations scams that contemporaneously crashed the French market, the 2001 Enron 'loophole', and the 2008 severe stock market crash in U.S., 1990 Indian Stock Market crash, and 2008 Kenyan Stock Market crisis, it is now common knowledge that severe stock market crashes are mostly induced by organized securities rackets. In almost all the cases, law is used as a vehicle to achieve the swindles.

In recent time, IMF, World Bank, and IFC, in conjunction with local officials, have been accused by insiders, of instigating "hot money cycle" devious schemes that destroy financial markets and economies of weaker and poorer nations. Instrumentality of the law is implicated as the means by which the fraudulent schemes are executed.

The simultaneity in the meteoric rise and precipitous crash of Nigeria stock market had all the marks of an organized securities scheme. The elaborate distortion of the legal and structural foundations of Nigeria capital market, statutory sabotage of Nigeria's SEC, unusual positioning and empowerment of Nigeria's Investments and Securities Tribunal and the tribunal's complicit roles, brazen misconducts of market operators and regulators before, during, and after the crash, atypical reticence of Nigerian government, all point to the crash being a organized event. Against the overwhelming weight of evidence, Nigerian authorities wrongly blamed global financial crisis for the crash of the stock market.

To understand the proximate causes of Nigeria stock market's N8.1 trillion ($60bn) crash, therefore, analysis of Nigerian securities laws should be undertaken. This paper examines the fidelity of the critical strategic policy-thrust as well as the legal and structural frameworks put in place for Nigeria capital market by the Nigerian principal securities laws, and concludes that the chronic dysfunctions crafted into Nigerian Investments and Securities Acts (repealed 1999 and the extant) 2007, served as veritable means used to execute the organized securities scheme that crashed Nigeria stock market between 2008 and 2009.

Unfortunately, the same irrational legal and structural frameworks with which the crash of Nigeria stock market was precipitated are still used to run Nigeria capital market. A cursory investigation also reveals that the same situation exists in Nigerian banking and other principal financial and economic sectors. Sadly too, Nigeria's national economy and the fate of Nigeria's 150 million citizens hinge on the unremitting financial market racketeering schemes.

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