There will be no breathing space for promoters of Ponzi schemes in Nigeria, the Securities and Exchange Commission (SEC) has assured.
At its Journalists’ Academy 2025 in Lagos a few days ago, the agency said it was determined to collaborate with other organisations to protect unsuspecting investors from losing their funds.
According to the Divisional Head for Legal and Enforcement at SEC, Mr John Achile, perpetrators of Ponzi schemes would be prosecuted in line with the Investments and Securities Act (ISA) 2025.
He said SEC would continue to ensure criminal investigation and prosecution in collaboration with law enforcement agencies such as the Nigeria Police Force, EFCC and Office of Attorney General of the Federation, among others.
Mr Achile further said the commission would continue to freeze the accounts and seal-up offices of operators who failed to register their tradable securities and assets with the regulator.
Highlighting the characteristics of Ponzi scheme, Mr Achile, who spoke on the topic, Combating Investments Fraud, Ponzi Schemes and Illegal Investments, said it requires the entrance of new investors to pay existing investors.
According to him, investors are usually provided with fake documents or incomplete documents.
He listed other characteristics to include high returns on investment with little or no risk, consistent promise of positive returns despite the economic difficulties, not registered by the appropriate regulatory agencies and promoters not known to the regulators.
He urged Nigerians to conduct thorough due diligence and be skeptical of “get-rich-quick” promises in order not to burn their hands, calling on investors to enquire from regulators of the sector of business touted before investing.
“Ponzi scheme could be structured as investment in agricultural business or processing along the value chain, investment in Bitcoin or cryptocurrency or other digital currencies and investment in gold coins or precious stones,” he said.
He noted that Ponzi scheme undermines confidence in the financial markets, loss of confidence in the regulator and the government when failure occurs, reduces deposit in commercial banks, diversion of savings, huge scale of loses to investors and attendant socio-economic problems.