A new report from the Securities and Exchange Commission (SEC) calls attention to the rise of bogus investment firms in the capital markets, urging investors to stay away from businesses that are illegal.
Speaking at the second post-Capital Market Committee (CMC) virtual media conference conducted over the weekend, SEC Director-General Lamido Yuguda cautioned Nigerians to avoid phoney financial gurus who claim to quadruple their money in a short period of time.
In addition to its commitment to zero tolerance for transgressions, he indicated that the commission would step up efforts to crack down on promoters of these unlawful investment companies in the capital market; adding that the commission has engaged in multi-level discussions with media platforms and public relations regulators, to curtail the activities of these illicit businesses
“While we continue our activities to resolve the complaints that have been forwarded to the commission through the official channels, it is important to reiterate to the investing public to be wary of unscrupulous schemes that promise unrealistic returns on investment”.
“He assured investors that the commission will not hesitate to deal decisively with any operator who carries out any activity outside the function(s) approved for it by the regulator”.
Ponzi schemes, according to Yuguda, threaten market development due to their prevalence, which has a negative impact on investor confidence.
Every month, every day, many of our citizens lost huge monies to Ponzi scheme operators and the commission has adopted a variety of measures including putting up the list of the authorised operators on our website so that interested investors will check our website to confirm that the scheme they are intending to invest in is through a registered operator by the SEC.
But unfortunately, many of these Ponzi scheme operators give mouth-watering promises and entice many gullible investors. In the end, monies are lost and these investors start flocking to our offices to complain.
The SEC chairman stated that the Commission’s efforts in resolving Ponzi scheme issues are intended at protecting investors and preserving market integrity and that the Nigerian capital market should be a safe haven for investors.
He pledged that the SEC would continue to use innovative approaches to prevent Ponzi scheme activity while soliciting the collaboration of key parties.