The Securities and Exchange Commission (SEC) on Friday vowed to clamp down on illegal capital market operators, especially operators of Ponzi Schemes.
This is as the commission has identified their activities as a huge problem for the economy and the country in general.
This riot act was read by the Director-General of SEC, Mr Lamido Yuguda, to capital market operators at the second post-Capital Market Committee (CMC) virtual news conference, who said that the commission would remain committed to zero tolerance for market infractions.
What the Director-General of SEC is saying
Yuguda said the commission would continue with the campaign against illegal operators in the capital market, especially Ponzi Schemes, according to the News Agency of Nigeria.
He said, “SEC has adopted multi-level engagements with media platforms and regulators of publicity agencies in order to curb the reach and activities of these illegal operators. While we continue our activities to resolve the complaints that have been forwarded to the commission through the official channels.’’
He warned the investing public to be wary of unscrupulous schemes that promised unrealistic returns on investment.
The SEC boss said, “We will like to use this opportunity to reiterate our commitment towards zero tolerance for market infractions. We urge every capital market operator to operate within the market functions approved for it by the commission.
“The commission will not hesitate to deal decisively with any operator who carries out any activity outside the function(s) approved for it by the commission. No capital market can grow without discipline and adherence to laid down rules and regulations.
“Every month, every day, many of our citizens lost huge monies to Ponzi Scheme operators and the commission has adopted a variety of measures.’’
He said that part of the measures adopted by the commission to check the activities of these illegal operators include putting up the list of the authorised operators on SEC’s website so that interested investors will confirm that the scheme they intend to invest in is through a registered operator.
He said that many of the Ponzi scheme operators give mouth watery promises and entice many gullible investors and in the end, monies are lost and these investors start flocking to SEC offices to complain.
Yuguda said, “We have engaged a number of regulators and a number of media platforms to ensure that the message is actually delivered to the public that any promised return that looks so generous should actually be suspicious.
“It is a continuous fight, we are not resting on our oars in this. These Ponzi Schemes are truly a cancer in our society and every hand must be on deck to fight this cancer.’’
What you should know
- SEC has been at the forefront of the fight against Ponzi schemes and illegal capital market operators, by stepping up its enforcement actions to safeguard the investing public, following an upsurge in their activities since 2019.
- The commission had in March 2020, warned stakeholders and the investing public against the activities of some unlawful/unlicensed market operators and promoters of fraudulent schemes as they listed 12 fraudulent Ponzi schemes with bogus investment and return claims.
- They had also in 2019, clamped down on some of these Ponzi scheme operators by blocking their bank accounts and real estate properties linked to them in addition to sealing off their premises.
- A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers.
I’d suggest that SEC also employs the use of instant messaging to reach millions of people across the nation, which of course will demand a diligent data analysis of demographics and socio-financial state of people around a different geopolitical zones and location. Ponzi scheme are also advertised or perpetrated on social and networking media and messaging apps such as Facebook, Instagram, WhatsApp etc., – Telegram being these schemers citadel. There’d also be a strong telemedia campaign to educate a large number of people. In addition, I’d appeal to the state government to empower the local government council to play a part as well. The victims of ponzi schemes do not live within a state rather they live within districts or circuits of any given LOCAL GOVERNMENT AREA, therefore it will be crucial to set up an outreach to educate people periodically at their homes and settlements about the financial comatose and mental health flops of being enticed to invest in what is a Ponzi scheme.
Did he really say “gullible investors”? He must be very stupid if he did. Addy Finance & Investment Limited was duly registered by SEC and it crashed with the funds of innocent investors that ended up being duped by the help of the so called SEC, yet they are not say anything. There’s been no reasonable explanation from the company, neither have we seen transparency in the process of refunding investors which is nothing meaningful to talk about.
Nigeria is a perfect example of an outlaw’s paradise. If you don’t have the power to arrest anyone you wish, then you have no business investing in this hell hole country. I’m not going to sugarcoat a thing for a hypothetically oriented nation like this. Please take your money out and invest in a country where people in authority actually have brains and are willing to do the right thing. If you trust Nigerian government to direct you on anything, you are on your own.
Addy Finance & Investment Limited was duly registered by SEC and it crashed with the funds of innocent investors that ended up being duped by the help of the so called SEC, yet they are not say anything. There’s been no reasonable explanation from the company, neither have we seen transparency in the process of refunding investors which is nothing meaningful to talk about. Nigeria is a perfect example of an outlaw’s paradise. If you don’t have the power to arrest anyone you wish, then you have no business investing in this hell hole country. I’m not going to sugarcoat a thing for a hypothetically oriented nation like this. Please take your money out and invest in a country where people in authority actually have brains and are willing to do the right thing. If you trust Nigerian government to direct you on anything, you are on your own.