The Securities and Exchange Commission (SEC) of Nigeria has issued a stern warning to celebrities, influencers, bloggers, and other promoters of unregistered investment schemes, emphasizing the legal ramifications of their actions. This warning comes on the heels of the newly enacted Investments and Securities Act (ISA) 2025, signed into law by President Bola Tinubu. This legislation specifically defines and criminalizes Ponzi schemes, holding promoters accountable with hefty penalties, including a minimum fine of N20 million and a jail term of up to 10 years. The SEC’s intensified campaign against fraudulent investment platforms underscores its commitment to protecting investors and maintaining the integrity of the Nigerian financial market.
The SEC’s Director-General, Emomotimi Agama, highlighted the Commission’s collaborative efforts with law enforcement agencies, including the Economic and Financial Crimes Commission (EFCC) and the Nigeria Police Force, to investigate and prosecute individuals involved in illegal investment activities. He stressed that the ISA 2025 explicitly targets influencers and bloggers who promote unregistered schemes, subjecting them to the same legal penalties as the scheme operators themselves. This clarification aims to deter the promotion of fraudulent investments by leveraging the reach and influence of these online personalities. The collapse of CBEX, a digital investment platform accused of defrauding Nigerians of over N1.3 trillion, serves as a stark reminder of the devastating consequences of unregulated investment schemes and the SEC’s resolve to combat them.
Agama underscored the ISA 2025’s expansion of the SEC’s regulatory purview to encompass digital assets. This marks a significant development in the Nigerian financial landscape, officially classifying virtual assets as securities and bringing Virtual Asset Service Providers (VASPs) and Digital Asset Exchanges under the SEC’s regulatory oversight. This new regulation mandates registration with the SEC and compliance with relevant rules, aiming to protect investors in the burgeoning digital asset market. The SEC’s proactive approach reflects the global trend of regulating digital assets to mitigate risks and ensure market integrity.
Investor education forms a cornerstone of the SEC’s strategy to safeguard the public from fraudulent investment schemes. Agama outlined various educational initiatives, including a dedicated podcast aimed at raising awareness about the dangers of unregistered investments. The SEC is also actively integrating capital market education into school and university curricula, equipping future generations with the necessary knowledge to make informed investment decisions. This comprehensive approach aims to cultivate a culture of financial literacy and empower individuals to identify and avoid potentially harmful investment opportunities.
The SEC urges the public to exercise due diligence by verifying the registration status of any investment scheme with the Commission before committing funds. Agama emphasized the age-old adage, “If it’s too good to be true, it probably is,” as a guiding principle for potential investors. The Commission has implemented robust surveillance mechanisms, including specialized departments dedicated to monitoring market activity, conducting on-site inspections, and proactively detecting early signs of fraudulent operations. This proactive approach reinforces the SEC’s commitment to maintaining a vigilant watch over the financial market and swiftly addressing potential threats to investors.
The ISA 2025 represents a substantial advancement in investor protection and market development within Nigeria. By strengthening regulatory oversight, particularly in the digital asset space, and intensifying its crackdown on illegal investment schemes, the SEC aims to foster a more robust and transparent financial market. Agama reiterated the SEC’s dedication to promoting financial inclusion and democratizing wealth creation through a well-regulated capital market. The Commission’s ongoing efforts to educate the public and proactively address fraudulent activities underscore its commitment to fostering a safe and sustainable investment environment for all Nigerians.
