Section 169 Investments and Securities Act

Section 169 of the Investments and Securities Act 2025 is about Misappropriation of clients’ funds. It is under Part XIII (Collective Investments Schemes) of the Act. It provides as follows:

(1) A manager, trustee or custodian shall not —
(a) misappropriate funds or securities of a client; or
(b) withhold, refuse, neglect or otherwise fail to remit the proceeds of sale of the client’s securities.

(2) A person who contravenes the provisions of subsection (1) commits an offence and is liable on conviction, to a fine of not less than N50,000,000 or an amount equivalent to four times the amount of profit derived by the person in the transaction, whichever is higher, and a further sum of N50,000 for every day the violation continues.

(3) In addition to the penalty prescribed under subsection (2) —
(a) the person referred to in subsections (1) and (2), shall be liable to restitute to the client the loss suffered with interest at the prevailing commercial bank rate; and
(b) the Commission may suspend or revoke the registration of the participant, or take any other action as it may deem fit.