SEC Proposes Tougher Penalties for Ponzi Schemes, Seeks Capital Market Reform
By Patience Ikpeme
The Securities and Exchange Commission (SEC) is taking decisive action to combat Ponzi schemes and other illegal investment activities.
The proposed Investment and Securities Bill (ISB) 2024, currently before the National Assembly, introduces stringent penalties for individuals and entities involved in such fraudulent schemes.
The Bill proposes a minimum fine of N20 million and a maximum prison sentence of 10 years for those found guilty of promoting or operating Ponzi schemes. This move aims to deter fraudulent activities and protect investors.
Senator Godswill Akpabio, President of the Senate, emphasized the importance of the ISB 2024 in modernizing Nigeria’s financial markets and fostering investor confidence. He highlighted the need for a robust regulatory framework to address the evolving challenges in the investment landscape.
Senator Osita Izunaso, Chairman of the Senate Committee on Capital Market, underscored the crucial role of the capital market in driving economic growth and development. He noted that the proposed Bill aims to strengthen the existing regulatory framework and adapt to the changing dynamics of the financial industry, including the emergence of fintech and digital assets.
The SEC Director-General, Dr. Emomotimi Agama, highlighted several key provisions of the Bill, including: The Bill strengthens the Investor Protection Fund (IPF) to compensate investors who suffer losses due to the failure of dealing member firms.
Regulation of Commodity Exchanges and Warehouse Receipts. This provision aims to develop the commodities ecosystem and enhance market efficiency. Stricter Penalties for Ponzi Schemes. The Bill imposes severe penalties on individuals and entities involved in Ponzi schemes, deterring fraudulent activities.
By enacting the ISB 2024, the SEC aims to create a more transparent, efficient, and investor-friendly capital market. This will contribute to economic growth, job creation, and financial inclusion.
