SEC Uncovers 12 Wonder Banks In Nigeria

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has alerted the investing public of activities of 12 fraudulent ‘ponzi’ schemes with bogus investment and return claims.

In a circular, SEC stated that the 12 companies were neither registered nor licensed for their activities warning the investing public to be wary of these unlawful and unlicensed operators and promoters of fraudulent schemes.

“The Commission, in recent time, has observed the proliferation of the operation of unlawful and unlicensed investment schemes, with promises of huge, but unjustifiable returns on investment,” SEC stated.

SEC outlined that the identified suspected promoters of ponzi and other fraudulent schemes included Loom Nigeria Money, Box Value Trading Company Ltd, Now-Now Alert, Flip Cash Investment, Result Investment Nigeria Limited, Helping Hand and Investment, No Failure Development and Empowerment Nig. Ltd, MBA Forex and Investment Ltd, Federate Investors Trading Company, Jamalife Helpers Global Ltd, Flexus Global Solutions and Investment Ltd and United Capital Investment Company Limited.

SEC urged the investing public to note that by virtue of the provisions of Section 38(1) of the Investments and Securities Act (ISA) 2007, only persons registered with the Commission can engage in capital market activities, thus making the actions of the entities listed above unlawful.

“Consequently, the general public is hereby advised to refrain from investing in any scheme of the entities listed above, and warns that any person who invests in an unlicensed and unlawful scheme does so at his own peril,” SEC stated.

SEC had in 2019 blocked assets valued at about N2.35 billion belonging to ponzi schemes as the Commission pushes to further confiscate illegal assets and prosecute operators of unapproved schemes.

Ponzi scheme refers to illegal phony savings and investment scheme often run by unapproved persons in violation of extant rules and guidelines. Ponzi scheme is also known as “wonder bank”.

SEC stated that it blocked four bank accounts and real estate properties linked to operators of ponzi schemes while the Commission also sealed premises of four operators in 2019. The blocked assets included N1.12 billion cash in various bank accounts and real estate properties valued at N1.23 billion.

Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk, said the Commission has recorded significant successes in its efforts to protect the public from unscrupulous persons.

She explained that 2019 saw an upsurge in the activities of ponzi schemes in Nigeria and the Commission had to step up its enforcement actions to safeguard the public and deter the illegal operators.

According to her, the Commission went after many of the promoters and directors of such schemes, securing a conviction last year while many others are presently being prosecuted.

“We will continue to combat ponzi schemes this year. We intend to continue leveraging on the Memoranda of Understanding that were signed between the Commission and key stakeholders like the Nigeria Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) to strengthen our ability to do this,” Uduk said.   (The Nation)