SEC advises Nigerians to shun ponzi schemes

The Securities and Exchange Commission (SEC) has again warned Nigerians to desist from investing in schemes that offer unreasonable returns and not approved by the commission.
Acting Director-General of SEC, Mary Uduk, who stated this in an interview with journalists in Abuja at the weekend, said the investing public must be wary of any investment that is proposing return levels that are unreasonably high.

She also advised investors to ensure that the fund managers and the products they are offering are registered with the commission.

Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where the operator, an individual or organisation, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.

According to her, such ventures have no tangible business model, as returns would be paid from other peoples’ invested funds, making it a fraudulent investing scam.

The SEC boss, who restated the commission’s resolve to make the capital market more user-friendly to boost investors’ participation in the market, said the commission had been doing a lot in terms of education to increase investors’ knowledge of the capital market and enable them to make informed investment decisions.

“There are new investible products in the Nigerian capital market. We have a lot of ethical funds. One of the safest areas to invest in is in mutual funds, and collective investment schemes and we encourage Nigerians to be part of these and others.

“The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value.

“These fraudsters or promoters of Ponzi schemes are the false prophets of the investment environment. They are the ill-wind that blows no good and at whose sight you must flee. They are to be avoided.

“This is one message you must keep spreading to family, friends, relations, and acquaintances to save them from the agony of loss of their hard-earned money,” she said.

Besides, Uduk informed investors of the SEC’s effort to migrate all shareholders to an e-dividend regime.

According to her, the essence of the e-dividend mandate management system is to eradicate or reduce to the barest minimum the incidence of unclaimed dividends.

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