The Securities and Exchange Commission has warned the general public against an online investment scheme tagged ‘MMM Federal Republic of Nigeria’, labeling it as a fraud. Punch Newspapers reports.
According to the SEC, the fraudsters encourage potential investors to invest with them promising a 30% returns on investment every month, shrouding it under the guise of ‘a mutual aid financial network’.
A Ponzi scheme is described as a fraudulent investing scam promising high rates of return with little risk to investors. The scheme generates returns for older investors by acquiring new investors.
“The commission hereby notifies the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi Scheme, where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission…Please note that anyone that subscribes to this illegal activity does so at their own risk.” Punch Newspapers reports the SEC as saying.
Similarly, the SEC warned against patronizing anyone who claims to ‘engage in foreign market activities’ without any registration, naming one Mrs. Oge C. Ottiwu, as an example.
“Section 38(1) of the Investments and Securities Act, 2007 requires any person who intends to operate as a professional in the capital market or carry on securities business to be registered by the commission before engaging in such activities. It is therefore illegal to carry on any kind of capital market business without registration,” it said in a post on its website.
Parts of this article originally appeared in Punch Newspapers.