The upper legislative chamber had cited a security report from the Department of State Services (DSS) as reason for its action.
But Falana advised Buhari to restrain the secret police from sabotaging the fight against corruption.
The lawyer said some senators under investigation by the commission ought not to have participated in the screening.
“The rejection of the nomination of Mr Ibrahim Magu as the chairman of the Economic and Financial Crimes Commission (EFCC) this afternoon by the senate on the basis of a security report compiled by the State Security Service is the height of official ridicule of the office of the president,” he said in a statement.
“It is high time the State Security Service was restrained by President Buhari from sabotaging the fight against corruption by the federal government.
“With respect to the senate the confirmation hearing hurriedly conducted today is illegal in every material particular. The participation of many senators who are either under investigation or being prosecuted by the EFCC has vitiated the entire proceedings of the senate on ground of conflict of interest.
“It is also a contravention of the rules of the senate which stipulates that matters which are sub judice shall not be discussed by the senate.”
Falana said Buhari could still re-nominate Magu or allow him to keep working in acting capacity.
“However, notwithstanding the rejection of the nomination of Mr. Magu by the senate the options open to president are clear and straight forward. They are as follows:,” he said
“Mr. Magu’s nomination may be re-presented to the Senate if and when the Federal Government decides to put its house in order
“Alternatively, the president may allow Mr. Magu to remain the acting chairman of the EFCC since he was appointed in that capacity pursuant to section 171 of the constitution.
“But if the president is not satisfied with Mr. Magu’s performance he is at liberty to appoint another person whose nomination will be forwarded to the Senate in accordance with section 2 (3) of the EFCC Act, 2004.
“In the light of the foregoing, President Buhari is enjoined to ensure that the fight against corruption is not derailed by highly placed corrupt elements who have enlisted the support of fifth columnists and reactionary forces in the government.”