The Securities and Exchange Commission has restated its commitment to intensifying the fight against Ponzi schemes in Nigeria, saying it will deepen inter-agency cooperation to identify and prosecute individuals and organisations involved in fraudulent investment operations. The move is in line with the provisions of the Investments and Securities Act 2025, which criminalises Ponzi schemes and other illegal investment practices.
The Divisional Head, Legal and Enforcement at the commission, Mr John Achile, stated this during the SEC Journalists’ Academy 2025 held in Lagos. He reminded journalists that the new law provides tough penalties, including long prison terms and heavy fines, for anyone caught promoting or managing such schemes. According to him, the commission is determined to ensure that the provisions of the ISA 2025 are fully enforced to protect Nigerians and strengthen confidence in the capital market.
Achile said the commission would continue to build stronger partnerships with relevant government agencies to trace those promoting Ponzi schemes and those who trade the fraudulent assets. He explained that these collaborations are necessary because the individuals behind such schemes often move funds across different channels, making it difficult for regulators to track their activities without joint intelligence and enforcement actions.
He added that the SEC would maintain its practice of freezing the bank accounts of suspected operators and sealing off the physical offices of the perpetrators as part of efforts to disrupt their operations and prevent further loss of investor funds. Achile also said the commission works closely with major law enforcement institutions such as the Nigeria Police Force, the Economic and Financial Crimes Commission, and the Office of the Attorney-General of the Federation.
Speaking on the topic, Combating Investment Fraud, Ponzi Schemes and Illegal Investments, Achile noted that the first major characteristic of a Ponzi scheme is that it depends on the continuous entrance of new investors to pay returns to earlier investors. He said scammers usually create a false impression of profit by using new money to pay old participants, adding that the cycle always collapses once the inflow of new investors slows down or stops.
He explained that promoters of Ponzi schemes often issue fake documents, incomplete paperwork, or unverifiable certificates to deceive investors. He listed other warning signs to include promises of unusually high returns with little or no risk, consistent profits even when economic conditions are tough, refusal to register with regulators, and promoters who are not known to government agencies responsible for supervising the sector in which they claim to operate.
Achile advised Nigerians to always conduct proper due diligence before investing in any business or scheme. He urged the public to be wary of “get-rich-quick” promises and encouraged investors to make enquiries from relevant regulators whenever they are unsure of the authenticity of an investment offer. He said many people fall victim simply because they fail to verify claims made by promoters.
The SEC official noted that Ponzi schemes can be disguised as legitimate investments in agriculture, cryptocurrency, digital assets, gold coins, precious stones, or similar businesses. He warned that scammers usually take advantage of trending sectors to lure unsuspecting Nigerians, especially during periods of economic hardship.
Achile stressed that these schemes cause widespread damage to the economy because they undermine confidence in financial markets and reduce trust in regulators and government institutions when they eventually collapse. He added that they also reduce the level of deposits in commercial banks, divert savings that should support productive activities, and leave thousands of families facing severe financial losses and social challenges.
The warning comes at a time when more Nigerians are turning to alternative investment platforms in search of higher returns due to rising cost of living and pressure on household incomes. Many fraudulent operators have exploited this desperation by offering unrealistic returns with the promise of quick payouts. The SEC said the public must remain cautious and should only invest in businesses regulated by recognised authorities.
Achile assured Nigerians that the commission will continue to intensify surveillance, enforcement, and investor education programmes to reduce the spread of fraudulent schemes across the country. He called on journalists to also support the fight by helping to raise public awareness on the risks associated with illegal investment operators.
