Proposed Investment and Securities Bill will prevent Ponzi schemes – SEC
The Securities and Exchange Commission (SEC) has said that the passage of the proposed Investments and Securities Bill (ISB) will check the rise of Ponzi/Pyramid schemes as well as other illegal investment schemes.
This was disclosed in a statement by the SEC Director-General, Mr Lamido Yuguda, on Sunday in Abuja.
He also added that it will boost growth in Nigeria’s financial services industry
Yuguda noted that passage of the bill will facilitate the effective functioning of the capital market to make it more competitive and also help in the ongoing economic diversification in the country.
He urged lawmakers to make the bill a reality, citing that expanding the categories of issuers is a key step toward the introduction of new innovations and offerings such as crowd-funding.
”Importantly, the bill introduces an express prohibition of Ponzi/pyramid schemes as well as other illegal investment schemes.
”The bill also prescribes a jail term of not less than 10 years for promoters of such schemes.
”It expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors.
”Minor reviews on various sections of the extant law have been carried out to provide greater clarity,” he said.
He noted that collaboration with National Pension Commission (PenCom) on the SEC Board for increased synergy is a major factor of the bill, which would also be beneficial to the Nigerian pension fund industry.
In an interview in August, Yuguda noted that on Ponzis, SEC has been working with other agencies of the government in terms of reducing the access of Ponzi schemes to advertising platforms such as the internet or the print media or electronic media.
“In terms of the synergies between the commission and law enforcement in the fight against Ponzi schemes, I can say that there is very good synergy and harmony between the SEC and the law enforcement agencies.
“It is worthy to mention that the SEC has a detachment of the Nigerian Police working directly with the SEC on capital market matters including Ponzi schemes and we have a good collaboration with the Nigerian Financial Intelligence Unit, the EFCC, especially in the fight against money laundry and Ponzi schemes”.
“We are expanding to other organizations that have control over our airwaves and internet systems because you still see a lot of adverts of Ponzi schemes on these. We have very strong collaboration and engaging continuously with these agencies to eliminate completely, all Ponzi scheme operations in our market” he said.
