- Advertisement -spot_img
34.3 C
Lagos
HomeTop News3 million Nigerians lost N18 bln to MMM Ponzi Scheme ~SEC

3 million Nigerians lost N18 bln to MMM Ponzi Scheme ~SEC

- Advertisement -spot_img

Over three million Nigerians have lost about N18 billion to Ponzi schemes and several other illegal investment schemes, according to the Securities and Exchange Commission (SEC).

SEC Director-General, Lamido Yuguda said the activities of Ponzi scheme operators threaten the protection of investors, the functioning of a fair and orderly financial market as well as the development of the economy at large.

He said the capital market regulator will continue to apply innovative measures to combat the activities of Ponzi schemes.

Yuguda, who spoke at a two-day webinar organised by the Attorney General Alliance-Africa in collaboration with the Commission said the advent of COVID-19 pandemic, which pushed transactions and other activities online has cause disruption in the way people live and provided the opportunity for the proliferation of Ponzi schemes.

READ ALSO: Twitter To Ban Users Who Repeatedly Post Fake News On Covid-19 Vaccines

He said Ponzi scheme operators have capitalised on the harsh economic climate to offer unrealistic returns on investment to unsuspecting investors.

These illegal schemes have also been able to solicit new investors and expand their operations through the increased use of online services.

“Ponzi schemes operate with unsustainable operating models that ultimately lead to huge losses for investors. Following the collapse of the MMM Ponzi scheme, the Nigerian Deposit Insurance Corporation (NDIC) had estimated that over 3 million Nigerians lost about N18 billion Naira.

“Several other illegal investment schemes have cost Nigerians their assets and life savings.”

Attorney General of the Federation and Minister of Justice, Abubakar Malami, said there is no underlying fundamental supporting investment in the Ponzi scheme so it can never deliver the returns on investment as promised.

Malami noted that Ponzi schemes are fundamentally different from legitimate investment opportunities as operators are simply fraudsters who take advantage of even the wealthy, intelligent, the sophisticated people.

“They are usually people who are very good at what they do and they thrive on trust and friendship promising easy cash in the short term and financial succour to the naïve.

“Ponzi scheme is an operational, social and economic risk and the fight against it is now a war, and in fact a full blown war. It is everywhere, not peculiar to us.

“The investment climate is not simplistic, it can be highly sophisticated and that is why the law regulates the space to ensure that the requisite duty of care by operators is not breached in any way, that there is a proper disclosure as required by law and that there is a generally level playing field for all stakeholders,” he added.

Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img