SEC deepens collaboration to prosecute Ponzi scheme perpetrators

SEC deepens collaboration to prosecute Ponzi scheme perpetrators

The Securities and Exchange Commission has reaffirmed its commitment to strengthening inter-agency collaborations to identify and prosecute the promoters of Ponzi schemes in line with the Investments and Securities Act 2025.

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

The PUNCH reports that the ISA 2025 criminalised Ponzi schemes and unlawful investment practices. It prescribed severe penalties, including imprisonment and hefty fines, for individuals and entities involved in these fraudulent investment schemes.

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

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

Speaking on the topic, ‘Combating Investment Fraud, Ponzi Schemes and Illegal Investments’, he said the commission would continue to freeze the accounts and seal up the offices of the perpetrators.

Highlighting the characteristics of a 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, a consistent promise of positive returns despite the economic difficulties, not being registered by the appropriate regulatory agencies and promoters not known to the regulators.

He urged Nigerians to conduct thorough due diligence and be sceptical of “get-rich-quick” promises in order not to burn their hands and called on investors to enquire from regulators of the sector of business touted before investing.

“A 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 loss of confidence in the regulator and the government when failure occurs, reduces deposits in commercial banks, diverts savings, and causes huge-scale losses to investors and attendant socio-economic problems.

Source: https://punchng.com/sec-deepens-collaboration-to-prosecute-ponzi-scheme-perpetrators/