SEC warns As Nigerians Lose More Than N500 Billion To Ponzi schemes
The Securities and Exchange Commission (SEC) has once again warned Nigerians not to invest in platforms that offer unreasonable returns and not registered by the commission, even as it disclosed that Nigerians lose up to N500 billion to Ponzi schemes.
Ponzi scheme forms of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
While fielding questions from the Senate Committee on Capital Market and Institutions during a courtesy visit to the Central Securities Clearing System (CSCS), the Executive Commissioner, Legal and Enforcement, SEC, Reginald Karawusa expressed worry that a lot of activities going on in the illegitimate market despite the commission’s efforts in addressing Ponzi scheme challenges.
He disclosed that more than 70 per cent of the caseload of the police and enforcement unit of the SEC is on the Ponzi scheme.
He said the promoters of these illegal outfits have moved more than N500 billion from Nigerians.
Therefore, he explained the significance for the Senate Committee on Capital Markets and Institutions to do everything within its powers to ensure that the Investment and Securities Bill is given speedy assent to ensure that perpetrators of the act are prosecuted.
He noted that the minimum of a 10-year jail term as stipulated in the bill would compel the promoters of these illegal outfits to forfeit the act.
Karawusa said, “We have been fighting the Ponzi scheme, it is a problem that we recognise and we are shutting these illegal outfits.
“We also join the advertising board to make sure that approvals are not given to people that would come to deceive the public.”
According to the Director-General of the SEC, Lamido Yuguda, the SEC has been fighting a serious war against Ponzi schemes, and has been alerting people to the proliferation of fraudulent investment outfits.