See Rogue broker alert and Death Part I
Francis Thuo (FT) stockbrokers have been suspended from the NSE for 14 days. Once this story is over, succession issues are likely to be blamed since the firm’s leader and visionary chairman passed away last year.
need more info: This month the Nairobi Stock Exchange launched a new site that is much improved with more news and features, but their sister regulators' CMA site appears not to have been updated in a year.
The FT story is one which the CMA should be on the forefront reassuring investors. We have seen reports on TV several times over the last year that insider and suspicious deals would be investigated, but no reports have been released or repercussions seen.
For shareholders, the process of transfering share accounts to other brokers was supposed to be seamless and shares should be safe if verified using CDS statements. It appears some FT clients were aware of FT liquidity problems and opted not to sell shares through the firm (and be issued with cheques which would bounce).
During the 14 day suspension, a deal is likely to be worked out to salvage the company, though after getting such a bad rep, customers are not likely to sign up unless FT relaunches under a new name, brand and service oreintation. One other brokerage was up for sale last year, but it would not attract any investors since its reputation was so poor.
2 comments:
If a 50 yr-old broker can go bust at the most successful period the NSE has ever known then CMA/NSE realy are asleep on the job. Investors need to be very wary about stuff like leaving huge balances in their CDs accounts. We all need to be keeping transaction receipts and asking for a regular statement of their holdings.
CMA and NSE have definitely been sleeping. Working in the Stock Market in the States, I cannot imagine some of these laxity taking place. They should enforce harsh fines and regular audits to ensure the brokerage firms are accountable and not messing around with investors' hard-earned money.
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