Commission Pledges Collaboration To Prosecute Ponzi Scheme Perpetrators

The Securities and Exchange Commission (SEC) has reaffirmed commitment to strengthen inter-agency collaborations to identify and prosecute the promoters of Ponzi schemes in line with the Investments and Securities Act (ISA) 2025.

The divisional head, Legal and Enforcement, SEC, Mr John Achile, said this at the commission’s Journalists’ Academy 2025 in Lagos.

Achille said, the commission would strengthen various interagency collaborations to identify the promoters and those trading the assets.

He said SEC would continue to ensure criminal investigation/prosecution in collaboration with law enforcement agencies such as the Nigeria Police Force, EFCC and Office of Attorney General of the Federation among others.

Speaking on the topic, ‘Combating Investments Fraud, Ponzi Schemes and Illegal Investments’, he said the commission would continue to freeze the accounts and seal-up offices of the preparators.
Highlighting the characteristics of Ponzi scheme, Achile said it requires the entrance of new investors to pay existing investors.

According to him, investors are usually provided with fake documents or incomplete documents.

He listed other characteristics to include high returns on investment with little or no risk, consistent promise of positive returns despite the economics difficulties, not registered by the appropriate regulatory agencies and promoters not known to the regulators.

He urged Nigerians to conduct thorough due diligence and be skeptical of “get-rich-quick” promises in order not to burn their hands.

He called on investors to enquire from regulators of the sector of business touted before investing.

“Ponzi scheme could be structured as investment in agricultural business or processing along the value chain, investment in Bitcoin or cryptocurrency or other digital currencies and investment in gold coins or precious stones,” he said.

He noted that the Ponzi scheme undermines confidence in the financial markets, causes a loss of confidence in the regulator and the government when failure occurs, reduces deposits in commercial banks, diverts savings, causes massive losses to investors, and attendant socio-economic problems.