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Securities and Exchange Commission has blocked bank accounts, seized property of some Ponzi schemes operators (popularly known as Wonder Banks) worth about N2.35 billion.

The scheme is an unapproved investment business that guarantees investors large interest rates and returns. With such operation adjudged to be a violation of the extant rules and guidelines of the SEC, the commission has continued to confiscate illegal assets and prosecute operators.

Details: The recent crackdown on their activities led to the loss of the N2.35 billion, which is the accumulation of N1.12 billion in various bank accounts and real estate properties valued at N1.23 billion.

The Acting Director-General, Securities and Exchange Commission (SEC), Mary Uduk disclosed that Ponzi schemes had been increasing despite the crackdown. It was reported by The Nation that activities of Ponzi schemes increased in Nigeria last year (2019).

This made SEC intensify its effort to curb the investment market of the wonder banks. The roundup of these Ponzi scheme operators followed several warnings against their activities. The regulator had warned that their operation is illegal, informing Nigerians and other investors not to fall victim to their false claims.

[READ MORE: Ponzi Schemes beware, SEC is coming for you)

Uduk stated that SEC had been targeting the promoters of the schemes and their directors, securing conviction with others still being prosecuted.

“We will continue to combat Ponzi schemes this year. We intend to continue leveraging on the Memoranda of Understanding that was signed between the Commission and key stakeholders like the Nigeria Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) to strengthen our ability to do this,” Uduk said.

Investors recover funds and shares: Also, it was disclosed that some investors were able to recover their shares and funds after issuing a complaint. According to Uduk, 167 complaints were received by the SEC while 102 were resolved in 2019, leading to the refund of N100.11 million and 8,848 shares to investors.

Meanwhile, N194.48 million was generated from penalties, with eight capital market fraud cases being prosecuted.

Uduk further stated that “The Commission will continue to adopt a zero-tolerance policy on unethical practices by in the capital market with a view to promoting a culture of compliance and enhanced reporting. We will adopt a more proactive inspection and market surveillance regime to nip unethical practices and misconduct in the bud. 

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“We shall be referring more cases of infractions for hearing before the SEC Administrative Proceedings Committee. Furthermore, we shall be referring more matters for criminal prosecution to the office of the Attorney – General of the Federation in line with the provisions of Section 304 of the Investments and Securities Act 2007.”

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