Wisdom Engraced
Keep up with the latest news and be part of our weekly giveaways and airtime sharing; follow our WhatsApp channel for more updates. Click to Follow us
The Securities and Exchange Commission (SEC) has expressed concerns over Nigerians’ appetite for investing in Ponzi schemes despite the availability of safer, regulated investment products. According to Dr. Sa’ad Abdulsalam, Head of the Enforcement Department at SEC, many Nigerians continue to fall victim to fraudulent schemes in search of unrealistic returns.
For further information, read more details here
Speaking at the Capital Market Enlightenment Programme, Abdulsalam noted, “There are many credible products for people to invest in. If you want a safe environment to invest in, you can invest in mutual funds. But most people are looking for very high returns. That is why I see people patronising the Ponzi schemes.”
Abdulsalam explained that the SEC registers fund management companies that develop products undergoing regulatory vetting before being offered to the public. He added, “There are non-interest funds, Islamic mutual funds. They are there, and there are many. Just go to the internet; you will find them, you will see them, and you will see who is promoting those products.
The SEC official advised potential investors to verify the legitimacy of investment offerings and promoters through the Commission. “Check and confirm: is the person a registered operator? And if you want to confirm, send us an email. We will tell you the status,” he said.
Abdulsalam warned that the proliferation of fraudulent investment schemes erodes public trust in formal investment platforms, leading to significant volatility and reduced investor engagement. “The erosion of market confidence caused by Ponzi schemes leads to significant volatility and reduced investor engagement,” he said. “The fallout not only damages individual finances but also tarnishes the reputation of regulatory institutions tasked with protecting investor interests.”
He also highlighted the far-reaching social and economic consequences of Ponzi schemes, including household financial losses, socio-economic stress, and community cohesion. “These losses are not just figures on a balance sheet,” he explained. “They represent broken trust, devastated livelihoods, and increased poverty in affected communities.”
Abdulsalam further warned against the misuse of Special Control Unit Against Money Laundering (SCUML) certificates, which some operators display to falsely imply legitimacy. “Because the certificate carries EFCC on top, most believe they can use it to give a colouration of legitimacy to their business. EFCC does not know about them. SCUML is just a unit,” he said
Please don’t forget to “Allow the notification” so you will be the first to get our gist when we publish it.
Drop your comment in the section below, and don’t forget to share the post
Jonathan Nwokpor
