SEC advises Nigerians to investigate before investing in any scheme

The Securities and Exchange Commission (SEC) has advised Nigerians to do due diligence on investment platforms through its portal before investing.

In March, the commission said three million Nigerians lost N18 billion to Ponzi scheme operators.

It also said the devastating impact of the COVID-19 pandemic on the Nigerian economy helped the proliferation of Ponzi schemes offering unrealistic returns on investment to unsuspecting investors.

Speaking with journalists on Friday, Lamido Yuguda, director-general of SEC, said investors need proper research to effectively curtail the fraud perpetuated by Ponzi schemes.

He said the commission has a list of registered and legitimate operators on its website.

“Ponzi schemes are truly a big problem for our economy. It is very common to the extent that many of our citizens lose substantial sums to these schemes,” Yuguda said.

“The commission has adopted a variety of measures such as putting up the list of authorised capital market operators on our website so any interested investor will check there to confirm if the fund they want to invest in is duly registered.

“Unfortunately, many of these Ponzi operators, once they give these mouthwatering promises, gullible investors put their money there, and they, unfortunately, lose it. 

“Then they now come to us to lay their complaint, but just two minutes on the SEC capital market operator portal will help you confirm if they’re genuine.”

Yuguda said the commission had held engagements with the National Insurance Commission (NAICOM) towards de-risking and insuring certain commodity assets.

He explained that a technical committee had been constituted, comprising representatives of the SEC, Standards Organisation of Nigeria (SON), AFEX, Lagos Commodities and Futures Exchange (LCFE) and the Nigerian Commodity Exchange (NCX) to deliver agro-based standards within three months.

“The commission has equally solicited the support of the National Bureau of Statistics to develop an effective price discovery system mechanism for the commodities ecosystem,” he said.

“A technical committee has been constituted for this purpose with the mandate of developing modalities for this exercise.”

The SEC boss said the commission acknowledged the critical role the capital market could play in the long-term financing of infrastructure in the country.

He added that the SEC would continue to work with the relevant stakeholders to unlock capital market instruments in funding key infrastructure needs, especially in roads, housing and clean energy.