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How to Identify Ponzi Schemes - SEC to Nigerians

Posted by Thandiubani on Tue 30th Aug, 2022 - tori.ng

Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda gave tips during a recent media briefting.

 
The Securities and Exchange Commission (SEC) has given Nigerians tips on how to identify ponzi schemes.
 
Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda spoke during a recent media briefing.
 
He said identifying bogus investment schemes and illegal operators would be easy once prospective investors look out for telltale signs that indicate the scheme or operator may be a Ponzi.
 
He said it was not very difficult to identify a Ponzi scheme as they usually promise unreasonably high returns just to lure people.
 
He noted that SEC has been fighting a serious war against Ponzi schemes, and been engaging and alerting Nigerians on the need to only deal with operators that are registered with the Commission.
 
He assured that the Commission would continue to collaborate and engage relevant agencies to eliminate Ponzi schemes operations in the capital market.
 
“We have their list on the SEC website and we have always said that if you go to an operator or when an operator approaches you, you must confirm that he is a licensed operator with the SEC. We have our numbers on how to reach our offices in the zones and we have done a lot of sensitisations in terms of seminars, webinars all in an effort to discourage people from going to Ponzi schemes.
 
“Unfortunately, a lot of people continue to patronise these Ponzi schemes, we have had cases that have been reported to us, our enforcement department and the police unit have been on many of these cases that have been reported to us trying to resolve them.
“I will like to use this opportunity to say that it is not very difficult to recognise a Ponzi scheme and the people that go to Ponzi scheme many of them are probably aware that there is a type of risk that they are taking, because when somebody tells you that I will pay you a 10 per cent per month on your investments, that means if you invest a million naira, every month you get 10 per cent of that which is N100,000. If you see something like this, it is probably too good to be true. Because when you compound the annual rate of return, you find out that it is way higher than any decent investments can give you.
 
“There are people who think they can be amongst the first people to go in and probably go out before it collapses but you may be taking a huge risk because you do not know if you are the first, may be the 1000th and could be that it is your own money that could get trapped. It is important for investors to understand the tale-tell signs of a Ponzi scheme and to alert the commission if they need some clarity,” Yuguda said.
 
The SEC boss added that the Commission had been working with other agencies of the government  to reduce the access of Ponzi schemes to the media.
 
“These collaborations are very important because Ponzi schemes are cancers to the capital market, a lot of money has been lost and it is unacceptable to continue to have this kind of investment losses by people.”
 
“In terms of the synergies between the Commission and the law enforcement on 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 on the fight against money laundry and Ponzi schemes,” Yuguda said.
 
Speaking in Abuja, Yuguda stated that the Commission has stepped up enlightenment on Ponzi schemes to ensure the message gets to the street while also working with various state government, local government and different agencies of government including non-governmental organizations to make sure that the message gets to the nooks and crannies of our country
 
“This is something that is depriving a lot of households of hard earned money. Money that could be used for a lot of other meaningful activities and needs are now surrendered to fraudsters essentially. When they come to you trying to convince you, they actually come in the form of very honest people, giving you all sort of promises in terms of financial return but once they get your money the story begins to change,” Yuguda said.
  
He reiterated the Commission’s commitment to continue to strive and fulfil its mandate of protecting investors and creating an enabling environment for market operations.
 


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