Why Nigerians Are Losing Money To Fraudulent Investment Schemes—Experts

Financial and investment experts have blamed the growing number of fraudulent investment schemes in Nigeria on a toxic mix of greed, financial illiteracy, and disregard for due diligence.

The warning follows the collapse of the unregulated digital investment platform, Crypto Bridge Exchange (CBEX), which left many investors facing devastating losses.

In separate interviews with THE WHISTLER, the experts expressed concern that despite numerous awareness campaigns and previous high-profile cases, Nigerians continue to fall victim to Ponzi-style operations due to the temptation of quick, unrealistic financial returns.

Managing Director of Arthur Steven Asset Management and former president of the Chartered Institute of Stockbrokers (CIS), Mr. Olatunde Amolegbe noted that investors often neglect regulated financial channels in favor of informal alternatives that promise fast profits.

“Many people are losing their money simply because they don’t take the time to verify the legitimacy of investment opportunities,” Amolegbe said.

“The public must realize that regulatory agencies like the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) exist to protect them.”

He urged Nigerians to conduct basic due diligence before parting with their money.

“Before depositing funds with any company, verify on the CBN’s website if it is licensed to collect funds. If it’s about buying stocks, mutual funds, or any capital market instruments, confirm the company’s registration with the SEC,” he added.

According to Amolegbe, many of the digital assets being promoted across various platforms today are not under the oversight of any regulatory body, leaving investors with no recourse when these schemes collapse, as seen in the case of CBEX.

Adding another perspective, Dr. Femi Ademola, Managing Director of AIICO Capital and a Chartered Financial Analyst (CFA), emphasized that greed and the pursuit of high-yield returns without commensurate risk assessment are key drivers of the Ponzi scheme phenomenon.

“Ponzi schemes are not new, and neither is their downfall,” Ademola said. “What’s concerning is how people repeatedly fall for them, ignoring basic principles of investment. These schemes thrive by offering overly attractive returns that are not grounded in real economic activity.”

He advised investors to align their investments with their risk profiles. “Low- to medium-risk investors should avoid anything promising extraordinarily high returns. Such offers are red flags. Anyone chasing high returns must be willing to accept the possibility of total loss,” he warned.

Also, Mr. David Adonri, Managing Director of HighCap Securities, called for tougher legal consequences—not just for the fraudsters behind Ponzi schemes, but also for their willing victims.

“Both the promoters and subscribers of fraudulent investment schemes are culpable,” Adonri argued. “Fraudsters should be prosecuted for their crimes, but those who ignore repeated warnings and still fall for these scams should also be held accountable for encouraging financial malpractice.”

Adonri contended that despite ongoing public education efforts, many Nigerians are lured by promises of quick riches and willingly engage in schemes they suspect may be illegitimate.

“We’ve issued countless warnings, and yet people continue to fall for these scams. At some point, we must hold individuals responsible for aiding and abetting economic fraud.”

The experts agree that while regulatory bodies must continue to enforce rules and intensify public awareness, individuals must also take greater responsibility in safeguarding their finances by asking the right questions and avoiding offers that appear too good to be true.

As digital financial products continue to grow in popularity, analysts warn that the risks of fraudulent schemes will remain unless there is a national shift in investor behavior—one grounded in knowledge, caution, and accountability.

Why Nigerians Are Losing Money To Fraudulent Investment Schemes—Experts is first published on The Whistler Newspaper