Ponzi scheme promoters risk wrath of the law, SEC threatens

The Security and Exchange Commission (SEC) has said those who initiate and promote Ponzi schemes in Nigeria will face the consequences by being brought to the book.

Mary Uduk, acting director-general of the capital market regulatory body, lamented in an interview that despite efforts to curb Ponzi schemes in Nigeria, the trend continued in 2019 as many Nigerians subscribed to them.

Describing the schemes simply as scams, Uduk said the SEC had identified and shut down a lot of them to save unsuspecting Nigerians from losing money to the schemes.

She said, “We identified and closed a lot of them. We thank the police, the EFCC and all the authorities that cooperated with us in closing these schemes. They still remain attractive and that is why we are intensifying efforts to educate the public.

“They are just there to defraud Nigerians and that is why we keep enlightening the public. We will close them down and their promoters will be made to face the law.

“The SEC will continue to work to protect investors and also to ensure these schemes do not see the light of the day and even when they do, they are closed down quickly.”

On why people still patronize Ponzi schemes despite series of warnings by the Commission, she said the trend is not limited to Nigeria alone and that Ponzi schemes thrive all over the world.

She said the promoters of the unwholesome schemes tap into human greed coupled with the current economic situation.

According to the Sec DG, people see the schemes as an easy escape route from poverty and that they continue to fall for it as a result of their ignorance of what other credible investment options are available for them to stake their money on.

“That is why the SEC and the entire capital market community have intensified efforts at investment education.

“People need to know that it’s easy to open a money market account, a mutual fund account, get stocks and things like that. We want the market to be easier, more accessible and we also want to have more products.

“We want a deeper market and we believe that with these combinations, we will reduce the number of Ponzi schemes coming up and reduce the number of investors putting their money into Ponzi schemes.” She said.