The Securities and Exchange Commission (SEC) has continued its efforts to stop the activities of Ponzi scheme operators in the country. The regulator has shut down five of these illegal fund managers located in Kano.
The five Ponzi scheme operators are MGB Global, Bitcoin Company, Money Rite, No Failure Development and X-World. The operators were said to have been nabbed after they made requests from people to send huge sums of money in the name of investments.
The SEC announced that it is collaborating with the Economic and Financial Crimes Commission (EFCC) to put an end to the trend of ponzi scheme in the country.
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Speaking on the issue, the Director, Market Development Department SEC, Edward Okolo assured that SEC would not relent in providing investors the necessary information that would help them manage their finances and recognize fraudulent financial schemes.
“A lot of us sitting in this room today have been cheated out of our hard-earned incomes by unscrupulous and illegal fund managers, who promise us returns too sweet to be true.
“However, given inherent human nature and the lack of requisite knowledge, we plunge into these schemes believing them to be true, only to realise that we have lost our earnings to faceless companies and individuals,” Okolo said.
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Also speaking on the danger of Ponzi schemes, the acting Director-General of SEC, Ms. Mary Uduk, according to Punch, made known that investors need to be careful of any investment scheme that was proposing a return level that was unreasonably high.
Uduk stated that having seen the repercussions of these fraudulent schemes, the commission has charged itself with the responsibility of enlightening and creating awareness of the capital market and the opportunities that abound so that people would take advantage of it.
“Our goal is to enlighten people about the capital market and the attendant benefits while also cautioning them against investing in fraudulent schemes that appear mouthwatering but are actually not capital market products.
“As the saying goes, ‘all that glitters is not gold.’ There is no doubt in my mind that the capital market presents a good platform for addressing many of Nigeria’s economic challenges.
“On our part as regulator, we shall continue to introduce new ideas and policies towards developing and regulating capital market that is dynamic, fair, transparent and efficient to contribute to the nation’s economic development, “ Uduk said.
What you should know: In related published Nairametrics articles, the SEC had often warned Nigerians to desist from investing in schemes operated by persons or organizations that were not registered to carry out fund management functions.
The step taken by SEC is a deliberate attempt to clean the financial sector of any illegal activity aimed at defrauding citizens of their funds. However, the harsh economic condition in the country led most credulous Nigerians into Ponzi schemes to make quick and fast cash out.
As attractive as Ponzi schemes are, they come with a lot of risks, without the approval of the Exchange Commission. This makes it illegal and unsafe.