Ponzi Scheme: National Assembly approves new Investment and Securities Act

In its move to stamp out Ponzi schemes, the Nigerian Securities Exchange Commission (SEC) has disclosed that the National Assembly has passed a new Investment and Securities Act (ISA) which aims to strengthen the commission’s regulatory framework.

While expressing his optimism about the development, the Director General of SEC, Emomotimi Agama, said that once the Act is signed into law by President Bola Ahmed Tinubu, it will provide greater powers to tackle fraudulent activities and enhance market integrity.

“We are excited that the National Assembly has passed the new Investment and Securities Act, and we are earnestly waiting for the President’s assent. The bill is currently undergoing administrative processes before reaching the president for approval,” he said.

Agama noted that the Act will provide stricter penalties and severe consequences for fraudulent and Ponzi schemes that have exploited innocent Nigerians and investors. He reinstated that perpetrators of such manipulations would face the wrath of the law.

“Ponzi schemes will no longer be an avenue for fraudsters to deceive investors. The penalties in the new ISA are stiff enough to deter such activities, and we are committed to implementing them fully,” he added. 

The SEC boss added that the commission is taking strategic steps to clean up the investment industry through the recent revocation of licences, suspension of market operators, and crackdowns on unregistered entities are just the beginning of a broader enforcement strategy.

See Also: EFCC uncovers Ponzi Scheme Academy in Abuja, arrests 133 suspects.

Protecting Nigeria’s capital market against Ponzi schemes

The SEC also reaffirmed its commitment to securing the capital market by ensuring that only fit and proper individuals operate in Nigeria’s capital market, vowing to clamp down on fraudulent activities and protect investors.

The agency said that its primary mandate remains investor protection, stressing that 2025 will usher in a period of zero tolerance for non-compliance. SEC noted that all market operators engaging in unethical practices would not be allowed to go unpunished. 

“It is important to state clearly that every investor in Nigeria is under the cover of the SEC as long as the person operates within the Nigerian capital market. And so the year 2025 is a year where we say that there is zero tolerance for any activity that does not fall within the laws of the Investments and Securities Act 2007,” SEC added. 

The commission explained that proper regulatory activities where companies would make public disclosure would be a key focus in building investors’ confidence and transparency. Whereas, companies that fail to provide adequate information to investors will face penalties, as withholding crucial details violates SEC regulations and the ISA.

Expressing its goal of eradicating Ponzi schemes, the commission said it wants to ensure that there is no hiding place for individuals or entities seeking to defraud investors in the Nigerian capital market.

“In 2025, we will intensify our efforts to protect investors. A protected investor is a powerful investor, and we will do everything within our regulatory powers to deter unscrupulous individuals from defrauding Nigerian investors.”

In its New Year message, the commission pointed out that aside from hunting down Ponzi schemes and improving investor’s security, its main goal is the development of Nigeria’s commodities market.

By strengthening the legal and regulatory framework, the commission said it will create a vibrant commodities ecosystem which includes leveraging on the country’s agrarian economy to unlock the market’s full potential.

SEC urged existing and prospective market operators to comply with its regulations, emphasizing that compliance and transparency are fundamental to building a strong and sustainable capital market.

It further pledged its commitment to ensuring a well-regulated market, with full backing from the administration of President Bola Tinubu noting that every investor in the Nigerian capital market is under the protection of the SEC, provided they operate within legal boundaries.