SEC moves to punish Ponzi Scheme Promoters 

The Securities and Exchange Commission, SEC has said it will continue to work to protect investors and also ensure the promoters of Ponzi schemes are made to face the full wrath of the law

Ponzi scheme is prohibited by the provisions of Section 38(1) of the Investments and Securities Act (ISA) 2007, it does not allow people that are not registered by the SEC to collect money from the public.

SEC in a statement quoted the Acting Director General, Ms Mary Uduk to have said the Commission was stepping up its regulatory oversight to ensure that such illegal entities are sealed off quickly .

According to her, “ Ponzi Schemes are illegal and that is why we keep warning the public about the dangers of these outfits. Even on our website we have videos enlightening the public on the dangers of Ponzi schemes

“Once we have information of anyone engaging in illegal fund management business, our enforcement department working with our police unit, shuts them down and the promoters are handed over to the relevant law enforcement agencies for further actions”

According to Uduk, the capital market has been properly positioned to attract Nigerians and other investors and provide benefits to those who invest therein.

She stated that SEC has sustained its investor education programme to assist people understand whatever issues they have around the capital market.

“But besides that, there are new products coming up every day in the Nigerian capital market. We have a lot of ethical funds, one of the safest areas to invest in is in Mutual Funds, Collective Investments Schemes and we encourage Nigerians to be part of these and others”.

Uduk said further that the SEC is presently undertaking various initiatives to make the capital market more user-friendly such that people can participate in it with greater ease, comfort and convenience.

She added: “There is the added and all-important purpose of ensuring that the gains of your participation, be these dividends, proceeds from share sales/transfers, etc. accrue to you seamlessly, without sweat and in the shortest time possible.

“The purpose is also to ensure that investors do not fall victims to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value.

She said that is why the SEC and the entire capital market community have intensified efforts at investment education.

“People need to know that it’s easy to open a money market account, a mutual fund account, get stocks and things like that. We want the market to be easier, more accessible and we also want to have more products.

“We want a deeper market and we believe that with these combinations, we will reduce the number of Ponzi schemes coming up and reduce the number of investors putting their money into Ponzi schemes.

Recall that the Commission last week released a list of 12 unlawful/unlicensed investment schemes which are: Loom Nigeria Money, Box Value Trading Company Ltd, Now-Now Alert, Flip Cash Investment, Result Investment Nigeria Limited, Helping Hand and Investment and No Failure Development and Empowerment Nig. Ltd

Others are “MBA Forex and Investment Ltd, Federate Investors Trading Company, Jamalife Helpers Global Ltd, Flexus Global Solutions and Investment Ltd, United Capital Investment Company Limited”.

The Commission informed members  of the public that by virtue of the provisions of Section 38(1) of the Investments and Securities Act (ISA) 2007, only persons registered with the Commission can engage in capital market activities, thus making the actions of these entities listed above unlawful.

“Consequently, the general public is hereby advised to refrain from investing in any scheme of the entities listed above, and WARNS that any person who invests in an unlicensed/unlawful scheme does so at his own peril.

The Acting DG said the listed outfits are not registered to carry out fund management functions of any sort, stressing that those who stubbornly patronize them would end up burning their fingers.

She therefore advised the general public to distance themselves from such schemes, adding, “Please note that anyone that subscribes to these illegal activities does so at their own risk.”

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