SEC pledges increased cooperation to prosecute Ponzi scheme criminals

The Securities and Exchange Commission (SEC) has made a firm pledge to enhance partnerships with other agencies to identify and bring to justice those involved in Ponzi schemes, aligning their efforts with the Investments and Securities Act (ISA) of 2025. Speaking at the commission’s Journalists’ Academy 2025 in Lagos, Mr. John Achile, the Divisional Head of Legal and Enforcement at SEC, stressed the need to intensify interagency collaborations to pinpoint the promoters and operators of Ponzi schemes.

Securing the commitment to conduct criminal investigations and prosecutions in conjunction with bodies like the Nigeria Police Force, EFCC, and the Office of the Attorney General of the Federation is a key focus for the SEC in addressing these fraudulent activities.

During discussions on “Combating Investments Fraud, Ponzi Schemes, and Illegal Investments,” Achile emphasized that Ponzi schemes rely on new investors’ funds to pay off existing participants, often providing them with counterfeit or incomplete documentation. Other red flags to watch out for are promises of high returns with little risk, continual assurances of positive returns despite economic challenges, lack of registration with the proper regulatory bodies, and unknown promoters to the regulators.

Achile warned the public to be vigilant and wary of promises of instant wealth to avoid falling victim to such schemes. He advised potential investors to scrutinize the legitimacy of a business opportunity thoroughly by reaching out to industry regulators before committing any funds.

Ponzi schemes can take on different forms, including purported investments in agriculture, Bitcoin or other cryptocurrencies, and even precious metals like gold, according to Achile. These deceptive practices erode trust in financial markets, damage faith in regulatory oversight, generate commercial bank deposit reductions, redirect savings, lead to significant losses for investors, and create broader socio-economic challenges when they inevitably collapse.

To combat these illicit financial activities effectively, the SEC is determined to crack down on Ponzi schemes by reinforcing its collaborations with various agencies and implementing robust investigation and enforcement measures, ultimately aiming to protect investors from falling prey to fraudulent financial operations that risk compromising the integrity of the financial system. By staying vigilant, conducting due diligence, and seeking counsel from regulatory entities, investors can safeguard themselves against these deceptive schemes and contribute to a more secure and transparent investment landscape.