The Securities and Exchange Commission (SEC) Nigeria has reaffirmed its commitment to strengthen inter-agency collaborations to identify and prosecute the promoters of Ponzi schemes in line with the Investments and Securities Act (ISA) 2025.
The Divisional Head, Legal and Enforcement, SEC, Barr. John Achile, who spoke on this commitment at the commission Journalists’ Academy 2025 event in Lagos, assured that the commission would strengthen various interagency collaborations to identify the promoters and those trading the assets.
He said SEC would continue to ensure criminal investigation/prosecution in collaboration with law enforcement agencies such as the Nigeria Police Force, EFCC and Office of Attorney General of the Federation among others.
Speaking on the topic “Combating Investments Fraud, Ponzi Schemes and Illegal Investments”, the legal expert said the commission would continue to freeze the accounts and seal-up offices of the preparators.
- Advertisement -
Reflecting on the characteristics of Ponzi scheme, Achile said the act required the entrance of new investors to pay existing investors and that investors were usually provided with fake documents or incomplete documents.
He listed other characteristics of the illegal practice as including promise by the promoters of high returns on investment with little or no risk, consistent promise of positive returns despite the economics difficulties, not registered by the appropriate regulatory agencies and promoters not known to the regulators.
While urging Nigerians to conduct thorough due diligence and be skeptical of “get-rich-quick” promises in order not to burn their hands, Achile called on investors to enquire from regulators of the sector of business touted before investing.
He said: “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.”
The legal expert noted that Ponzi scheme usually undermine 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.
