The Securities and Exchange Commission (SEC) of Nigeria has issued a stern warning, declaring an intensified crackdown on individuals promoting Ponzi schemes and other illegal investment platforms across the country.
Deepening Law Enforcement Collaboration
Speaking at the Journalists' Academy 2025 in Lagos, Mr. John Achile, the SEC's Divisional Head of Legal and Enforcement, revealed that the commission is strengthening its partnerships with key security and law enforcement agencies. This collaborative effort aims to track, investigate, and prosecute those involved in fraudulent investment schemes.
The agencies include the Nigeria Police Force, the Economic and Financial Crimes Commission (EFCC), and the Office of the Attorney General of the Federation. Achile emphasized that this move is empowered by the provisions of the Investments and Securities Act (ISA) 2025.
Enforcement Actions and Red Flags
The regulator outlined specific enforcement measures it will take against offenders. These include freezing the bank accounts and sealing the offices linked to operators and promoters of illegal investment schemes.
Mr. Achile, while speaking on "Combating Investment Fraud, Ponzi Schemes and Illegal Investments," detailed common characteristics of these scams to help the public identify them:
- Promises of unusually high returns with little or no risk.
- Consistent profit guarantees regardless of economic conditions.
- Operations not registered with the SEC or other relevant regulators.
- Promoters who are unknown to oversight agencies.
- Reliance on funds from new investors to pay returns to earlier participants.
- Issuance of fake or incomplete documentation to victims.
He cautioned that these schemes are often disguised as opportunities in agriculture, digital currencies like Bitcoin, or trading in gold and precious stones.
Staggering Losses and Socio-Economic Impact
The SEC official highlighted the devastating consequences of Ponzi schemes, which extend beyond individual victims. He warned that they erode public confidence in the financial markets, reduce deposits in commercial banks, and divert savings. The widespread losses ultimately lead to broader socio-economic challenges for the nation.
The commission disclosed that Nigerians have lost an estimated N316 billion to Ponzi schemes and illegal fund managers over the years. A stark recent example is the CBEX platform, an AI-hyped scheme. According to the Nigerian Financial Intelligence Unit (NFIU), CBEX allegedly defrauded investors of about 1.3 trillion naira within just one year of operation.
Globally, the problem is immense. A report from blockchain analysis firm Chainalysis indicates that roughly $9.9 billion was lost to cryptocurrency scams worldwide in the previous year.
Urgent Advice for Nigerian Investors
In light of these threats, the SEC urged extreme caution. Mr. Achile advised Nigerians to thoroughly verify any investment opportunity with the relevant regulators before committing funds. He stressed that greed and a lack of awareness are major factors that sustain these fraudulent operations.
Prospective investors were urged to treat any "get-rich-quick" offer with skepticism and to seek independent clarification from authorities. The commission had previously raised an alarm about 79 suspected fraudulent investment platforms, including a prominent name like FF Tiffany, which is alleged to have defrauded local and diaspora investors of billions.
The SEC's renewed vigilance, backed by the stricter penalties introduced in the ISA 2025, signals a tougher stance against financial crimes designed to protect the integrity of Nigeria's financial system and safeguard citizens' hard-earned money.
