SEC Tells Nigerians How To Treat Ponzi Schemes

The Securities and Exchange Commission (SEC) has called upon Nigerians to report any suspected fraudulent investment schemes to the commission for thorough investigation and appropriate action.

In a notice released on Thursday, April 24, to the investing community, the Commission cautioned that Ponzi investment schemes present significant risks to the development of the capital market.

The Commission highlighted the increasing threats and dangers associated with Ponzi schemes, illicit investment activities, and unregistered digital asset platforms.

It further clarified that deceitful entities and individuals have persistently taken advantage of unsuspecting investors by making misleading promises of substantial returns, often utilising the appeal of digital assets to foster a false sense of credibility.

The notice read, “The public is strongly advised to be wary of investment opportunities that promise guaranteed or unusually high returns with little or no risk.

“These include unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes, without subjecting themselves to the prescribed processes for obtaining the prior approval of the SEC.

“The SEC reiterates in this regard that ‘If it sounds too good to be true, it likely is.”

The commission has advised prospective investors to perform comprehensive due diligence prior to making any investments and to confirm the registration status of the entity or individual presenting the investment via the SEC’s official website: https://sec.gov.ng/cmos.

SEC clarified that Section 196 (3) of the Investments and Securities Act, 2025, makes it a criminal offence to promote or operate unregistered or prohibited schemes.

The SEC affirmed its dedication to identifying and prosecuting violators to the fullest extent of the law. It noted that such violations may result in a penalty of no less than ₦20 million or a prison sentence of 10 years, or both.

“We encourage the public to partner with the SEC to safeguard the integrity of the investment environment in Nigeria by promptly reporting suspected illegal investment schemes to the SEC,” the notice concluded.”