The Securities and Exchange Commission (SEC) on Tuesday stated that over three million Nigerians have lost about N18 billion to Ponzi schemes and several other illegal investment schemes.
The Director General of the SEC, Mr. Lamido Yuguda, disclosed this at a webinar organised by the Attorney General Alliance-Africa in collaboration with the SEC.
According to him, the continued activities of Ponzi schemes is a threat to the protection of investors, the functioning of a fair and orderly financial market as well as the development of the economy.
Yuguda said the devastating impact of the COVID-19 pandemic on the economy, the low-interest rate environment and rise in use of online services for transactions had helped the proliferation of ponzi schemes.
He said ponzi schemes operators have capitalised on the harsh economic climate to offer unrealistic returns on investment to unsuspecting investors.
He said: “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.
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“Several other illegal investment schemes have cost Nigerians their assets and life savings.”
The Attorney General of the Federation and Minister of Justice, Abubakar Malami, in his speech said explained that there are underlying investments ins and they are not expected to deliver the returns on investment as promised.
Malami stated they are fundamentally different from legitimate investment opportunities as operators are simply fraudsters who take advantage of the wealthy, intelligent and sophisticated people.
