The Director-General of the Securities and Exchange Commission, Dr Emomotimi Agama, has warned Nigerians to beware of firms that claim that the registration of their companies with the Corporate Affairs Commission and SCUML certificate from the Economic and Financial Crimes Commission have empowered them to operate investment schemes in Nigeria.
Agama said this during an interview with journalists on Wednesday at the sidelines of a sensitisation tour against Ponzi schemes held at the Garki Market in Abuja.
He said it was disheartening that some Nigerians and foreign companies have specialised in defrauding Nigerians through Ponzi schemes, adding that the government will no longer sit back and watch billions of naira taken away from the people through Ponzi schemes.
Nigerians have collectively lost over ₦1.3trn to the CBEX Ponzi scheme, underscoring the urgent need for greater awareness.
The SEC DG said Nigerians must understand the dangers of putting their hard-earned money into ventures that are not registered or regulated by the SEC.
Agama said, “It is disheartening that some Nigerians and foreign accomplices have specialised in duping Nigerians, and the government won’t sit and watch Nigerians being duped, and this is what the SEC is coming out to the people to educate them: if it’s too good to be true, then watch out.
“We have seen many Ponzi schemes in the past, and the Investments and Securities Act was signed into law by the President, and the law recommends a ₦20m fine and 10 years imprisonment for offenders of the 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 and 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 certification are not enough to show that the company is registered with the 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.”
Also speaking to journalists, the Assistant Director, Enforcement Department, SEC, Tope Onwionoko, said the management of the Commission is very passionate about financial literacy, especially with respect to Ponzi schemes that have become a scourge in society of late.
She said, “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 around the entirety of Nigeria. And as a starting 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 and 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 victim are usually people who are not knowledgeable about how Ponzi schemes work. So, I think that for most of them, it is a 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 a 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.”
