The Securities and Exchange Commission (SEC) Nigeria has raised fresh concerns over the growing use of artificial intelligence (AI) technology by fraudsters to promote fake investment schemes, warning the public to be wary of platforms promising guaranteed profits and celebrity-backed endorsements.
The Commission, in a statement issued on Sunday, disclosed that unregistered platforms such as CBEX, Silverkuun and TOFRO had been cheating unsuspecting investors with so-called AI-powered trading systems that promise unrealistic returns.
It lamented that despite being unlicensed, these platforms continued to deceive the public about the legality of their operations until a series of disclaimers were issued against their operations.
According to the capital market regulatory commission, the fraudsters are increasingly turning to deepfake videos and AI-generated contents to lure victims.
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For instance, it cited manipulated clips of politicians, celebrities, and television hosts that were being circulated through Facebook ads, Instagram reels, and Telegram groups to give their fraudulent schemes an appearance of legitimacy.
In addition, the SEC maintained that the fraudsters were also fabricating endorsements and testimonials that appear genuine, making traditional fraud detection methods less effective.
“Scammers are exploiting AI to fabricate endorsements and testimonials that appear genuine. This has made traditional fraud detection methods less effective, hence the need for tech-enabled regulation and greater public awareness.”
To counter the growing threat, the SEC explained that it had been adopting advanced surveillance systems capable of detecting fraudulent activity in real time, adding that partnerships with the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU) are being strengthened to enable data-sharing and joint enforcement actions.
The commission maintained that it was moving from reactive to predictive oversight, which is essential in combating fraud and systemic risks in our market, adding that it has also engaged social media companies to clamp down on misleading ads and cautioned influencers against promoting unlicensed investment schemes.
It warned: “Any influencer or blogger found to be complicit in promoting illegal platforms will face regulatory sanctions or even prosecution”
The Commission urged Nigerians to take extra precautions before investing, stressing that any scheme promising daily profits, zero risk, or celebrity-backed endorsements should be treated with suspicion.
It clarified that any investment that guaranteed unrealistic returns or uses manipulated videos of public figures should immediately raise a red flag, advising Nigerians to verify the registration status of any investment platform on its website, where a list of licensed Capital Market Operators is available.
In addition, the SEC advised investors to alway confirm that registration numbers displayed on company websites match the details on the SEC portal and avoid platforms that only operate through Telegram or WhatsApp without a verifiable office address.
It further stated that suspicious platforms or fraudulent ads can be reported directly to the SEC via email at sec@sec.gov.ng, by phone or through its online complaints portal.
