Risks abound if an investor opts to buy stocks by proxies

I have noticed that the rich use nominee accounts to own shares of other organisations. Almost all Nairobi Stock Exchange listed companies have proxy shareholders operating as nominee shareholders and I would be interested to get the reasons, pros and cons of operating as such.

As you have noted, it is a common practice for many investors in listed companies to use nominee shareholders to buy stock on their behalf. In fact, this is more common than individual investors buying shares in their own names.