SEC laments resurrection of Ponzi schemes in Nigeria, vows to clamp them down

The Securities and Exchange Commission (SEC) has lamented the resurgence of Ponzi schemes in Nigeria as Nigerians keep falling for the gimmicks and scams, and has vowed to continue cracking down various Ponzi schemes and any illegal fund managers in Nigeria.

Lamido Yuguda, the director-general, SEC, made the revelation during an enlightenment workshop and investor clinic with the Federal Ministry of Finance, Budget and National Planning and its agencies in Abuja.

According to Yuguda, “The Nigerian financial sector is experiencing a resurgence of Ponzi schemes and illegal fund managers. Thus, the commission is poised to continue to apply measures and seek the cooperation of relevant stakeholders to combat the activities of these unlawful schemes, which have undermined the reputation of our financial markets and dampened investors’ confidence, among other things.

“The SEC firmly believes that the Nigerian capital market can attain its potentials if market operators/participants contribute their respective quotas to the growth of the market,” he said, revealing how these illegal fund managers lure their subscribers with promises of huge and unjustifiable returns on investments, adding that the problem is a major concern for regulators in the financial sector.

Yuguda further expressed the capital market regulator’s commitment to ensuring and maintaining an environment enabled by the appropriate regulatory framework with timely and affordable access to the market, zero-tolerance for infractions, heightened investor confidence and awareness, innovative product development and good governance practices. He also spoke about the need to restore the confidence of investors and as well as improve the participation of retail investors in the capital market, as recent findings showed that the demographics of current investors showed that youths have shunned the market.

Zainab Ahmed, minister of finance, budget and national planning, represented by Stephen Okon, director, home finance at the ministry, said the enlightenment programme is in alignment with the SEC’s master plan. She urged investors to take advantage of the initiatives set out in the 10-year master plan of SEC.

“It is worthy to know that the SEC marked out a 10-year plan for the development of the Nigerian capital market.

“The objective is to devise strategies for the development of the Nigerian capital market in key areas such as investor protection and integration, professionalism and product innovation and the expansion of the capital markets role in Nigeria’s economy,” Ahmed said, noting that the commission has deemed it fit to host members of staff of the ministry and its agencies in a capital market training procession and workshop with investors.