SEC warns Nigerians about investment scams generated by AI

Investors in Nigeria should remain vigilant against artificial intelligence (AI)-driven scams that promise high returns and falsely associate with celebrities. The Securities and Exchange Commission (SEC) recently warned about the rise of fraudulent platforms that use deepfake videos and AI-generated content to deceive unsuspecting individuals seeking profitable investment opportunities. These scams, often spread through social media channels like Facebook, Instagram, and Telegram, seek to appear legitimate by featuring manipulated endorsements from well-known figures.

Platforms like CBEX, Silverkuun, and TOFRO have been identified by the SEC for promoting AI-powered trading systems that guarantee unrealistic profits. Despite not being registered or regulated by the commission, they continue to mislead the public with false claims of AI-driven investments. To combat this growing threat, the SEC has implemented advanced surveillance systems to detect fraudulent activities in real time and collaborate with the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU) to enhance data-sharing and enforcement efforts.

The use of AI by scammers to create fake endorsements and testimonials has rendered traditional fraud detection methods ineffective, prompting the need for tech-enabled regulation and increased public awareness. The SEC emphasized the transition from reactive to predictive oversight to better safeguard investors and prevent systemic risks in the market. Additionally, the commission has engaged with social media companies to suppress misleading advertisements and cautioned influencers against promoting unlicensed investment schemes, threatening regulatory sanctions or legal actions against those found complicit.

Nigerians are advised to exercise caution when considering investments, especially those promising daily profits, zero risks, or celebrity endorsements. Any investment opportunity that guarantees unrealistic returns or relies on manipulated videos should be treated with suspicion. To verify the legitimacy of investment platforms, individuals can cross-reference registration details on the SEC website’s list of licensed Capital Market Operators. It is recommended to avoid platforms operating solely through messaging apps like Telegram or WhatsApp without a verifiable physical address. Suspected fraudulent platforms or misleading ads can be reported directly to the SEC for investigation.

As the SEC remains dedicated to protecting investors from fraudulent activities, it encourages individuals to remain vigilant, conduct thorough due diligence before investing, and report any suspicious platforms to safeguard their financial interests. Through enhanced regulatory measures, advanced surveillance technology, and strategic partnerships with financial regulatory agencies, the commission aims to strengthen investor protection and maintain the integrity of the Nigerian capital market.