Sunday, April 11, 2021

Nigerians have lost N18bn to MMM, other Ponzi schemes – SEC

Headline

Rayyan Alhassan
https://dailynigerian.com/author/rayyan/
Rayyan Alhassan is a 30-year-old graduate of Journalism and Mass Communication at Sikkim Manipal University, Ghana. He is the acting Managing Editor at the Daily Nigerian newspaper, a position he has held for the past 3 years. He can be reached via [email protected], or www.facebook.com/RayyanAlhassan, or @Rayyan88 on Twitter.
tiamin rice

The Securities and Exchange Commission, SEC, Tuesday disclosed that over 3 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, made these known during the opening of a two-day webinar organised by the Attorney General Alliance-Africa in collaboration with the SEC.

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

READ  NADDC partners 3 Nigerian varsities on Electric Vehicles – Jelani Aliyu
READ  96 companies bid for rehabilitation of NNPC infrastructure

Mr Yuguda, therefore, described the continued activities of Ponzi schemes as a threat to the protection of investors, the functioning of a fair and orderly financial market, as well as the development of the economy at large.

While assuring the public and relevant stakeholders its efforts towards combating the activities of Ponzi schemes, Mr Yuguda noted that the devastating impact of the COVID-19 pandemic on the Nigerian economy has helped the proliferation of Ponzi schemes.

According to him, other factors included the low-interest rate environment, coupled with the increased use of online services to interact and transact.

The SEC Boss said the Commission’s efforts in addressing Ponzi schemes are therefore geared towards investor protection and preserving market integrity, emphasising that the Nigerian capital market should be a safe destination for investors.

READ  96 companies bid for rehabilitation of NNPC infrastructure

Also speaking, the Attorney General of the Federation and Minister of Justice, Abubakar Malami,  said there is no underlying investment for Ponzi scheme.

According to him, Ponzi schemes can never deliver the returns on investment as promised.

Mr Malami stated that they are fundamentally different from legitimate investment opportunities, as the perpetrators are simply fraudsters who take advantage of even the wealthy, intelligent, the sophisticated people.

READ  ICPC discovers 25 houses, arms belonging to ex-Governor Yuguda's aide

“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.

READ  Nigerian govt to establish micro enterprises in 774 LGAs — Akume

“Ponzi scheme is 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.

Related News

Latest News

cosgrove