SEC Warns Public of Rising AI-Driven Investment Scams
…Cites Deepfake Endorsements
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has issued a stern warning to Nigerians concerning a rising wave of artificial intelligence (AI)-driven scams targeting investors with promises of guaranteed profits and fake celebrity endorsements.
The Commission recalled that platforms such as CBEX, Silverkuun, and TOFRO were operating illegally by advertising AI-powered trading systems that promised unrealistic returns. The regulator stated that these platforms posed serious risks to investors, prompting the SEC to issue disclaimers against their activities.
“These platforms are not registered or regulated by the SEC, yet they continued to mislead the public with false claims of AI-driven investments. They posed serious risks to investors hence the commission issued series of disclaimers against their activities,” the Commission stated.
The SEC explained that fraudsters are increasingly using sophisticated technology, including deepfake videos and AI-generated content, to lure victims. Manipulated videos featuring politicians, celebrities, and TV hosts are being shared across social media platforms like Facebook ads, Instagram reels, and Telegram groups to lend fraudulent schemes an air of credibility.
According to the Commission, scammers are cleverly exploiting new technology, “Scammers are exploiting AI to fabricate endorsements and testimonials that appear genuine. This has made traditional fraud detection methods less effective, hence the need for tech-enabled regulation and greater public awareness.”
To counter the growing technological threat, the SEC is overhauling its regulatory approach. The Commission explained that it is adopting advanced surveillance systems capable of detecting fraudulent activity in real time. It is also strengthening partnerships with the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU) to enable data-sharing and joint enforcement actions.
The regulator stated its new proactive stance, saying, “We are moving from reactive to predictive oversight. This is essential in combating fraud and systemic risks in our market.”
The SEC has also begun engaging social media companies to clamp down on misleading advertisements and issued a strong caution to digital promoters. The Commission warned influencers and bloggers against promoting unlicensed investment schemes: “Any influencer or blogger found to be complicit in promoting illegal platforms will face regulatory sanctions or even prosecution.”
The Commission urged Nigerians to take extra precautions before investing, cautioning that any scheme promising zero risk or celebrity-backed endorsements should be viewed with immediate suspicion.
“Any investment that guarantees unrealistic returns or uses manipulated videos of public figures should immediately raise a red flag,” it stated.
The Commission strongly advised Nigerians to verify the registration status of any investment platform on the SEC’s official website, which contains a list of licensed Capital Market Operators. Investors should confirm that registration numbers displayed on company websites match the details on the SEC portal and avoid platforms that operate solely through Telegram or WhatsApp without a verifiable office address.
Suspicious platforms or fraudulent ads can be reported directly to the SEC via email at sec@sec.gov.ng, by phone at +234 9 462 1168, or through its online complaints portal.
