New Law Imposes N10m Fine on Ponzi Scheme Operators in Nigeria- IST
By Patience Ikpeme
Nigeria’s newly enacted Investments and Securities Act now mandates significant punitive measures, prescribing fines of no less than N10 million against operators of Ponzi schemes.
This disclosure came from Amos Azi, Chairman of the Investments and Securities Tribunal (IST), during a stakeholders’ engagement meeting in Abuja, held to unveil the Tribunal’s new e-filing platform.
Azi noted that the previous 2007 Act did not include such specific sanctions against Ponzi scheme operators. He explained that the new provisions in the Act are expected to act as a strong deterrent and help combat the prevalence of illegal investment schemes within the capital market.
In addition to the new financial penalties, Azi announced a key procedural change: once the e-filing system becomes fully operational, the physical submission of cases will no longer be permitted. He explained that the stakeholders’ meeting was convened to ensure legal practitioners receive adequate training on the new digital system.
Azi also outlined other significant innovations introduced by the new Act. These include the recognition of digital assets as securities and the legal acknowledgment of cryptocurrency, alongside provisions for virtual service providers. He explained that these additions pave the way for the establishment of virtual exchanges and broaden the Tribunal’s jurisdiction to hear disputes arising in these emerging areas, provided they first pass through the established complaint management framework.
Speaking about the IST’s move to the e-filing platform, Azi described it as a positive development poised to enhance Nigeria’s investment climate. He conveyed that this initiative is expected to boost investor confidence and stimulate intentional capital investment in the country.
In an interview following the meeting, Owhor Clever, Chairman of the Nigerian Bar Association (NBA), Gwagwalada Branch, appealed to the Tribunal to extend training opportunities to all NBA members. This, he argued, would ensure seamless court proceedings under the new system.
The stakeholders’ engagement on e-filing and case management saw online participation from legal practitioners and interested parties in Abuja, Port Harcourt, and Enugu State. The Investments and Securities Tribunal is scheduled to go live with the e-filing platform, barring any unforeseen changes, in July 2025. This move represents a significant step towards modernizing Nigeria’s capital market dispute resolution mechanisms.
