The Securities and Exchange Commission (SEC) has issued a warning to Nigerians regarding unregistered online investment schemes that are being aggressively promoted across various social media platforms. The commission cautioned that many of these schemes operate similarly to Ponzi schemes, posing significant financial risks to unsuspecting investors.
Public Notice on X
In a public notice shared on its official X handle on Thursday, May 14, the SEC highlighted a noticeable increase in fraudulent investment promotions on platforms such as WhatsApp, Instagram, Telegram, Facebook, and TikTok. The commission stated, "The attention of the Securities and Exchange Commission has been drawn to the increasing promotion of unregistered online investment schemes on social media applications and websites."
Characteristics of Fraudulent Schemes
According to the SEC, these schemes often lure Nigerians with promises of unrealistic or guaranteed returns. The notice added, "Many of these investment schemes exhibit characteristics of Ponzi or prohibited investment schemes, while some operators of such schemes also provide unauthorised investment services to members of the public."
Registration and Authorization
The SEC emphasized that many of these online platforms are neither registered nor authorized to operate within Nigeria's capital market. The commission warned Nigerians against relying on investment advice from individuals or organizations not licensed by the regulator. "Only SEC-registered operators are authorised to provide investment and advisory services in Nigeria," it stated.
Advice to the Public
The regulator advised members of the public to verify the registration status of any investment platform or company before committing funds. It further warned that schemes promising unusually high or guaranteed profits often expose investors to fraud and severe financial losses.
Growing Concerns
This latest warning comes amid growing concerns over the rise of digital financial scams and online Ponzi schemes targeting Nigerians through social media and internet-based platforms. The SEC continues to monitor these activities and urges the public to remain vigilant.
