SEC Warns Public Against False Claims by Unregistered Investment Firms
By Patience Ikpeme
The Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has issued a strong caution to Nigerians regarding the deceptive tactics employed by certain firms.
Dr. Agama specifically warned against companies that falsely claim their registration with the Corporate Affairs Commission (CAC) and the possession of a Special Control Unit against Money Laundering (SCUML) certificate from the Economic and Financial Crimes Commission (EFCC) authorize them to operate investment schemes within Nigeria.
Dr. Agama gave this warning on Wednesday during a sensitization tour aimed at combating Ponzi schemes, held at the Garki Market in Abuja.
He expressed his dismay at the prevalence of both Nigerian and foreign entities that have made it their practice to defraud Nigerians through Ponzi schemes. Dr. Agama asserted that the government will no longer remain passive while billions of Naira are illicitly taken from citizens through these fraudulent operations.
The SEC Director-General stressed the critical importance of Nigerians understanding the inherent risks associated with entrusting their hard-earned money to ventures that are not duly registered and regulated by the SEC.
Dr. Agama stated, “It is disheartening that some Nigerians and foreign accompanies have specialized in duping Nigerians and govt won’t sit and watch Nigerians being duped and this is what SEC is coming out to the people to educate them that if it too good to be true, then watch out.”
He reminded the public of the numerous Ponzi schemes that have emerged in the past and noted the recent enactment of the Investments and Securities Act, signed into law by the President. This legislation, Dr. Agama explained, stipulates a penalty of a N20 million fine and a 10-year imprisonment term for individuals convicted of operating Ponzi schemes.
“So, that has empowered us to be in a better position to flush out all these fraudulent investment schemes that are damaging our economy,” Dr. Agama affirmed.
He elaborated on the purpose of the sensitization outreach, stating, “We are using this sensitization outreach to bring information to our people and that is why we are here and telling them that we are here to assist them to confirm legitimate investment schemes and we are letting them know we feel their pain.”
Dr. Agama further clarified that “As we are doing this, we have helped to educate them against being duped. CAC registration and EFCC certificate is not enough to show that the company is registered with SEC and these are red flags.”
He also cautioned against training programmes organized by these fraudulent entities as they are often designed to lure unsuspecting individuals into their illegal schemes. Dr. Agama’s message to Nigerians was clear: “Verify before you invest in any scheme, and that is our message to Nigerians.”
Speaking to journalists, the Assistant Director of the Enforcement Department at the SEC, Tope Onwionoko, conveyed the deep concern of the Commission’s management regarding financial literacy, particularly in light of the recent surge in Ponzi schemes.
She stated, “So, we want everybody to know about it, from the oldest to the youngest, from the rich to the poor. We want the message to go round the entire Nigeria. And as a start off point, management decided that it’s a good thing to come to the market, because we know the place the people who trade in the market hold in the economy.”
Ms. Onwionoko expressed the Commission’s hope that this outreach would empower market participants to identify red flags, ultimately making Nigeria an inhospitable environment for Ponzi scheme operators. “So, we feel that we should bring this message to them, hoping that they will understand what to look out for, what the red flags are, and by the time we are done, the people that perpetuate Ponzi in Nigeria, they will carry their bags and leave, because it will no longer be business as usual.”
She attributed the vulnerability of individuals to Ponzi schemes primarily to a lack of understanding of how these schemes function. “The people who fall victims are usually people who are not knowledgeable about how Ponzi schemes work. So, I think that for the most of them, it is lack of knowledge, essentially.”
While acknowledging the potential role of economic hardship, Ms. Onwionoko maintained that “more than anything, is lack of knowledge. Because even if you are hard up for cash in the economy, and there is an opportunity for you to lose the small that you have, you won’t go there.”
She concluded by stating, “So I think it’s because people don’t know what to look out for. They don’t know that somebody is attempting to collect what is in their hand. That’s why they fall victim.”
