Nyag’anya Stock Brokers..
I was perusing the Standard and came across this story on yet another stock broker that is engaging in funny business (same problem, different name). This time it’s Nyaganya Nyagah Stock Brokers who, according to the Standard: “…. are being investigated by the Capital Markets Authority (CMA) over misappropriation of clients’ money and unauthorised sale of shares”. And wouldn’t you know? The NSE is going to bail them out so that they can go back to stealing clients money (What’s the definition of a stock broker? Someone who invests your money until it’s all gone).
Now I know all the patriotic Kenyans are going to come out here and start screaming: “but, but, but…there’s corruption everywhere, not just in Kenya”. Yes, yes,…that’s true, but the penalties for theft are so steep, that many people are too afraid to go down that road (it’s not that people in the west are better or more moral. None of us is that good. It’s the fear of punishment that keeps 99% of us on the straight and narrow and if that fear is removed, then you will continue stealing because the temptation is so great).
Why would the NSE bail out a corrupt broker? I mean, who in their right mind is going to go back and invest their money with this broker? would you?
I’m not sure if the people at the NSE and the CMA understand how important the rule of law is to public investing. If the public can’t trust the process, they will keep their money in the bank or under their mattresses and the exchange will not grow.
I keep saying that punishment serves a very important public purpose. You have to send a message to both the victims (whose money may have been misappropriated) and to the perpetrators (who misappropriated the money), that this sort of behavior will not be tolerated.
This is the second broker who’s been caught stealing their clients money. I guess the lesson is don’t invest your money with just one broker (if you are going to do it at all spread it out: 30% here; 30% there, etc, etc…just in case one goes down). I used to make fun of my Korean friends mum who puts money from her shop in pickle jars tucked away in her basement (I’m serious…I went down to the basement and couldn’t believe my eyes. Cash, cash, everywhere in these huge glass bottles. It was an amazing site, I must say ). I then realized this was part of their culture (this idea of literally holding on to your money and not trusting anyone with it; Asians are very smart people).
The government is not going to protect you (we saw it with the clashes and we are seeing it with your money). Raila’s message of the government coming to do everything for you is just plaing fantasy and if you believe it, you will suffer.
Someone suggested that another alternative would be to do like Somali’s and just buy gold and keep it in your house (afterall, isn’t gold the universal base currency?).
KE,
This is too much, I mean, a second broker almost going down coz of stealing client’s name within a period of a year ?
This tells me that it’s common practice in the kenya brokerage community.
I’m not surprised by Jimnah Mbaru coming out to bail these guys and at the same time giving excuses of sijui “he’s not really bailing them out but…….” yada yada.
The thing is, in kenya there’s so much conflict of interest within the brokerage community. I mean, Jimnah mbaru himself is the NSE Chairman, yet his firm is part of the NSE…Conflict of interest right there. It’s like the chairman of Goldman sachs, or Morgan stanley being the chairman of the New York stock exchange. He’d be given all the IPO business and capital raising to his firm, or at least a huge chunk of it.
I don’t expect NSE to discipline their brokers, this should be the work of the CMA, which seems to be a toothless dog. CMA should enforce the law and punish these errant brokers.
Nyaga was actually broke at the sametime as Thuo if not before. I’ve been hearing complaints about their twitchy fingers since 2006 or before when they used to cash in peeps dividends.
Its CMA that has been asleep on the job. Not surprising given Ntalami, its CEO (now former) was a himself banned from broking when he was at Sterling Secutiries.
KE
smart koreans. smart somalis. i learnt sometime back to hold on to cash(pillow+mattress bank).the recent chaos bore me out on this one, i didn’t sweat it, but you should have seen the queues outside the atms.
not sure about gold though, how do you hold that? in bangles & earrings like the indians?
Mzeiya,
just who is paying the 100m for nyaga’s bail out? the nse, the cma, or the brokers? is it some sort of insurance they have?
I agree with you, about smart koreans..yet they still manage to leave the american dream,its true. The masai people of kenya used not to trust people with there money too. A dude could sell ,say 4 cows,and sits on >100k somewhere between the shukas , rungu and the sword.SMART. Even Mr. Michael Waweru could not know about it, no VATregisters required. So its tax free.
But somebody has finally been able to convince them to get that money to the bank now ..safaricom introduces MPESA..and guese what? the moran with a cell phone likes the idea (trap).
I wonder how its going to play out as Visa and mastercard are out to westernize or olympicnise the Chinese economy…I heard that, the idea of CC “borrowing to spend ” is quite a new phenomenon in some parts of asia . I suppose its this culture that has enabled them to buy alot of the US debt and lend (give?) to Africa.
So may be these Nyaga brokers are a blessing in disguise..to remind me to get a ” PICKLE JAR” . May be its the only way out otherwise somebody needs to go to jail, or be fined.
Just what:
yup – angles and earrings, but Somalis’ can keep those in their homes because no one would dare break in (it would be a suicide mission on your part).
Razor:
If one of the largest brokerage houses like REFCO can go down, anyone can. I guess it’s a lesson not to put all your eggs in one basket.
I had a cds account with nyaga,my names are david imbayi wekesa id 23599790 ,i need to buy shares.kenya airways or E A cables pliz advice.
Ineed to trade on line.