The Director General of the Securities and Exchange Commission (SEC) Nigeria, Mr. Lamido Yuguda, has restated the regulatory commission’s commitment to continuously partner relevant agencies in its strive to completely eliminate all Ponzi schemes in the nation’s capital market.
Yuguda who gave this hint in Abuja noted that the SEC had been fighting a serious war against Ponzi schemes and been engaging and creating awareness among investors to eschew dealing with the illegal operators, who are not registered with the commission.
He explained: “We have their list on the SEC website and we have always said that if you go to an operator or when an operator approaches you, you must confirm that he is a licensed operator with the SEC. We have our numbers on how to reach our offices in the zones and we have done a lot of sensitizations in terms of seminars, webinars all in an effort to discourage people from going to Ponzi schemes.
“Unfortunately, a lot of people continue to patronize this Ponzi schemes, we have had cases that have been reported to us, our Enforcement Department and the police unit have been on many of these cases that have been reported to us trying to resolve them”, the Director General added.
The investment expert pointed out that it was not very difficult to identify a Ponzi scheme as they usually promise unreasonably high returns just to lure people, adding that people patronizing Ponzi scheme are probably aware that there is a type of risk that they are taking.
Yuguda further clarified: “When somebody tells you that I will pay you a 10% per month on your investments, that means if you invest a million naira, every month you get 10% of that which is N100,000.00. If you see something like this, it is probably too good to be true. Because when you compound the annual rate of return, you find out that it is way higher than any decent investments can give you.
“There are people who think they can be amongst the first people to go in and probably go out before it collapses but you may be taking a huge risk because you do not know if you are the first, may be the 1000th and could be that it is your own money that could get trapped.
“It is important for investors to understand the tale-tell signs of a Ponzi scheme and to alert the commission if they need some clarity”, he added
The Director General further hinted that the commission had been working with other agencies of the government in terms of reducing the access of Ponzi schemes to the advertising platforms, the print media or electronic media i.e. the radio and television.
Yuguda reiterated the Commission’s commitment to continue to strive and fulfil its mandate of protecting investors and creating an enabling environment for market operations.
