SEC Threatens to Clampdown on People Promoting Ponzi Schemes in Nigeria
- The SEC said it is strengthening partnerships with major law enforcement agencies to investigate and prosecute Ponzi scheme operators and promoters in Nigeria
- The Commission threatened to freeze accounts and seal offices linked to illegal investment promoters, noting that the Ponzi schemes damage confidence in the financial system
- A senior official in the commission urged Nigerians to verify investment claims with regulators, stressing that illegal schemes lead to significant economic losses for both individuals and the country
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, tech and macroeconomic trends in Nigeria.
The Securities and Exchange Commission (SEC) has threatened to clamp down on Nigerians promoting Ponzi schemes and other illegal investments in the country.
The SEC’s Divisional Head of Legal and Enforcement, Mr John Achile, while speaking during the Journalists’ Academy 2025 in Lagos, stated that the commission is deepening its collaboration with key law enforcement agencies to track, investigate, and prosecute individuals promoting Ponzi schemes across the country.
Source: Getty Images
The regulator said the move is in line with the provisions of the Investments and Securities Act (ISA) 2025, Vanguard reported
According to Achile, the SEC is working more closely with the Nigeria Police Force, the Economic and Financial Crimes Commission (EFCC), and the Office of the Attorney General of the Federation, among other agencies.
Achile explained that the Commission will continue to take enforcement actions such as freezing bank accounts and sealing offices linked to operators of illegal investment schemes.
While speaking on the topic: “Combating Investment Fraud, Ponzi Schemes and Illegal Investments,” he outlined common features of Ponzi schemes, noting that they depend on funds from new entrants to pay earlier investors.
He added that promoters often issue fake or incomplete documents to their victims.
He also identified other red flags, including unusually high returns with little or no risk, consistent promises of profit regardless of economic conditions, lack of registration with regulators, and promoters who are unknown to oversight agencies.
Achile advised Nigerians to carry out proper checks before committing their money to any investment, and to treat “get-rich-quick” offers with caution.
He urged prospective investors to seek clarification from relevant regulators in the sector being promoted.
According to him, Ponzi schemes may be disguised as investments in agriculture, digital currencies such as Bitcoin, or gold coins and precious stones.
He warned that such schemes erode public confidence in financial markets, reduce deposits in commercial banks, divert savings, and cause extensive losses that lead to wider socio-economic challenges.
Several victims who lost millions of naira will still remember the recent AI-hyped Ponzi scheme CBEX.
According to the Nigerian Financial Intelligence Unit (NFIU), an estimated 1.3 trillion naira was lost to the fraudulent investment platform within one year of its operation in Nigeria.
Source: Getty Images
SEC earlier disclosed that Nigerians have lost about N316bn to Ponzi schemes and illegal fund managers over the years, Punch reported.
The commission identified greed and ignorance of many victims as sustaining the menace. A blockchain analysis firm, Chainalysis reported that some $9.9 billion was lost to crypto scams globally last year.
SEC warns Nigerians of 79 suspicious investment platforms
Legit.ng earlier reported that the SEC raised the alarm on 79 suspected Ponzi and fraudulent investment schemes, adding that it was investigating the platforms while urging Nigerians to avoid transacting with them.
This includes full criminal prosecution under the newly signed Investment and Securities Act (ISA) 2025, which introduces harsher penalties for financial crime.
Among the marked fraudulent companies is FF Tiffany, a prominent name in the list, which allegedly defrauded both local and diaspora investors of billions of naira
Source: Legit.ng
