The Securities and Exchange Commission (SEC) Nigeria at the weekend expressed optimism that the passage of the proposed Investments and Securities Bill (ISB) will check the surging incidents of Ponzi/Pyramid and other illegal investment schemes in the country.
The Director-General of the commission, Mr. Lamido Yuguda, was quoted in a statement that the passage of the Bill would also impact positively on the nation’s financial services industry and facilitate the effective functioning of the capital market to make it more competitive and also help in the ongoing economic diversification in the country.
He, therefore, urged lawmakers now considering the bill to pass it, pointing out that expanding the categories of issuers, which is one of the provisions of the bill, is a key step toward the introduction of new innovations and offerings such as crowd-funding.
The investment expert clarified: ”Importantly, the bill introduces an express prohibition of Ponzi/pyramid schemes as well as other illegal investment schemes. The bill also prescribes a jail term of not less than 10 years for promoters of such schemes.
”It expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors. Minor reviews on various sections of the extant law have been carried out to provide greater clarity”, Yuguda added.
In addition, the director-general noted that collaboration with National Pension Commission (PenCom) on the SEC Board for increased synergy remained a major provision in the bill which will also be beneficial to the Nigerian pension fund industry.
Yuguda recently hinted that the SEC had been collaborating with other agencies of the government to prevent Ponzi schemes owners’ access to advertising platforms such as the internet or the print media or electronic media.
In addition, he said that there was a growing synergy between the commission and law enforcement agencies, including the Nigerian Financial Intelligence Unit, the EFCC, in the fight against Ponzi schemes.
