The Securities and Exchange Commission, SEC, has warned that
promoters and operators of any Ponzi Scheme in the country risk a penalty of
not less than N20 million or imprisonment to a term of 10 years or both, upon
conviction as prescribed by the provisions of the newly signed Investments and
Securities Act 2025.
The SEC’s Director-General, Dr. Emomotimi Agama who stated
this in Abuja, said the goal of the new legislation is to strengthen the legal
framework governing Nigeria’s capital market, better protect investors, and
introduce reforms that will promote market integrity, transparency, and
sustainable growth.
He explained that previously, the SEC lacked the legal power
to prosecute Ponzi scheme operators, which made it difficult to bring offenders
to justice.
However, under the new law, those convicted of operating
Ponzi schemes face a jail term of 10 years or more. “With the new law, they now
face a 10-year jail term and beyond,” he said.
He further explained that the Act stipulates a minimum fine
of N10 million for anyone operating a Ponzi scheme in Nigeria.
“So, N10 million is not the entire penalty or the entire
money that will be charged or sanctioned to any suspecting or any accused
capital market or non-capital market operator. It is just part of the penalties
and or the sanctions that will be meted against such persons,” Agama explained.
The SEC Director-General also said that sanctions will
include “disgorgement,” meaning that any profits or gains obtained from
defrauding Nigerians will be recovered adding “It is not about the quantum of
the fraud, it is about sanctions that would deter people from even getting into
it”.
Also, Agama said the new ISA has also provided the SEC with
the power to be able to obtain and request telephone conversations and all
other conversations that are required to Prosecute Ponzi operators.
“We recognize that a lot of Nigerians have fallen prey to
these sponsor schemes and the reason why that is the case is because there were
no sanctions. You know enough to deter them from doing this so what this Act
has done is to introduce measures for Ponzi scheme operators and intending
Ponzi scheme operators not to be able to do this again against the wish and
will of Nigerians.
“Protecting the investors in Nigeria is a cardinal
responsibility of the SEC and this law has provided the SEC with stronger
powers to be able to do that. This law has also been able to provide the SEC
with the power to be able to search phones and get phone records for people who
are interested in dealing with Nigerians or interested in duping Nigerians. We
are able to get these records and quickly provide enforcement actions for the
people that are involved so for us it is limitless,” he added.
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