The Director General of the Securities and Exchange Commission, Emomotimi Agama, has cautioned Nigerians against assuming that registration with the Corporate Affairs Commission or possession of a SCUML certificate from the Economic and Financial Crimes Commission legitimizes investment schemes.
Agama issued the warning on Wednesday during an interview with journalists at a sensitization outreach against Ponzi schemes, held at Garki Market in Abuja.
He expressed concern that some individuals and foreign entities have increasingly engaged in defrauding Nigerians through Ponzi schemes, stressing that the government would no longer tolerate the continued loss of billions of naira to such scams.
“It is disheartening that some Nigerians and foreign companies have specialised in duping Nigerians and government won’t sit and watch Nigerians being duped. This is what SEC is coming out to the people to educate them [about] that if it’s too good to be true, then watch out,” Agama said.
He highlighted that Nigerians had collectively lost over N1.3 trillion to the CBEX Ponzi scheme, underscoring the urgent need for greater public awareness.
“We have seen many Ponzi schemes in the past, and the Investments and Securities Act has been signed into law by the President. The law recommends a N20m fine and 10 years imprisonment for offenders of Ponzi schemes.
“So, that has empowered us to be in a better position to flush out all these fraudulent investment schemes that are damaging our economy.
“We are using this sensitisation outreach to bring information to our people, and that is why we are here, telling them that we are here to assist them to confirm legitimate investment schemes, and we are letting them know we feel their pain.
“As we are doing this, we have helped to educate them against being duped. CAC registration and EFCC certificate is not enough to show that the company is registered with SEC, and these are red flags.
“Training programmes being organised by these people to lure people into their schemes are also illegal. Verify before you invest in any scheme, and that is our message to Nigerians,” he said.
Also speaking, Assistant Director, Enforcement Department of the SEC, Tope Onwionoko, emphasized the Commission’s commitment to financial literacy, especially regarding the growing spread of Ponzi schemes.
“So, we want everybody to know about it, from the oldest to the youngest, from the rich to the poor. We want the message to go round the entire Nigeria. And as a start-off point, management decided that it’s a good thing to come to the market, because we know the place the people who trade in the market hold in the economy.
“So, we feel that we should bring this message to them, hoping that they will understand what to look out for, what the red flags are, and by the time we are done, the people that perpetuate Ponzi in Nigeria, they will carry their bags and leave, because it will no longer be business as usual.
“The people who fall victims are usually people who are not knowledgeable about how Ponzi schemes work. So, I think that for most of them, it is lack of knowledge, essentially.
“And of course, we want to believe that economic hardship has a part to play. But more than anything, it is lack of knowledge. Because even if you are hard up for cash in the economy, and there is an opportunity for you to lose the small that you have, you won’t go there.
“So I think it’s because people don’t know what to look out for. They don’t know that somebody is attempting to collect what is in their hand. That’s why they fall victim,” she added.