The Securities and Exchange Commission (SEC) has once again issued a strong advisory to the investing public, warning Nigerians against falling for Ponzi schemes and other illegal investment platforms that continue to exploit unsuspecting citizens.
The Commission, in a statement released this week, urged investors to verify the registration status of any Capital Market Operator (CMO) before committing funds. The verification can be done through the SEC’s official portal at www.sec.gov.ng/cmos.
“It takes less than five minutes to verify if a firm is registered. If it’s not listed on our site, it’s not licensed to take your money,” the Commission stated.
This latest advisory follows a long history of financial scams that have plagued the Nigerian economy. Over the past decade, several high-profile Ponzi schemes, including MMM, MBA Forex, and other fraudulent digital platforms, have defrauded Nigerians of billions of naira, with victims ranging from low-income earners to high-net-worth individuals.
A Costly History of Scam Investments
Despite repeated warnings from the SEC and other financial regulators, thousands of Nigerians continue to fall victim to fraudulent schemes promising unrealistic returns on investment. The collapse of schemes like MBA Forex “which promised up to 20% monthly ROI” left scores of investors in financial ruin.
Mrs. Joyce Adeyemo, a retired schoolteacher from Ibadan, shared her experience. She invested ₦3 million of her retirement savings into a scheme promoted by a trusted acquaintance.
“I believed it was real because even my pastor endorsed it. I got returns for two months, and then everything disappeared,” she said.
Such testimonies are not uncommon. The schemes typically operate using initial investor funds to pay early adopters , creating a false sense of legitimacy, until the system collapses.
SEC’s Push for Investor Protection
The SEC’s investor protection framework hinges on public education and easy access to verification tools. The Commission has stepped up efforts to crack down on unlicensed operators, while emphasizing the importance of individual due diligence.
Efe Ebelo, the SEC’s Head of Public Affairs, reiterated the Commission’s stance:
“Greed and ignorance are the twin engines of these scams. We advise the public to use our verification portal, ask questions, and be cautious of any investment offering guaranteed high returns.”
The Commission is also working with other government agencies to track, prosecute, and shut down fraudulent operators. However, officials note that regulatory intervention is often reactive, and that prevention begins with the investor.
Digital Influence and Social Media Risks
In recent times, the rise of social media influencers and unregulated online marketers has complicated efforts to clamp down on Ponzi operations. Platforms like Instagram, WhatsApp groups, and Telegram channels have become fertile ground for the promotion of illegal investment schemes.
Financial analysts warn that the viral nature of these promotions creates a dangerous herd mentality, especially among young people and the digitally connected middle class.
“People tend to follow influencers blindly. The perception is that if someone popular is endorsing a scheme, it must be safe,” said Chucks Emeka, a fintech consultant based in Lagos.
The Human Toll
Beyond financial losses, many victims suffer emotional trauma and strained relationships. In some communities, entire cooperative societies and church groups have lost pooled funds to fraudulent schemes.
“We lost over ₦10 million as a youth group in our church,” Emeka added. “No one saw it coming, and no one wants to talk about it anymore.”
Call for Vigilance
As the Nigerian economy navigates inflation, unemployment, and rising cost of living, more citizens are looking for ways to grow their savings. This has created fertile ground for fraudsters offering quick-fix solutions.
The SEC’s advisory is clear: Before you invest, verify. The Commission’s official portal provides real-time access to the list of approved CMOs, offering investors a critical tool to avoid scams.
“If it sounds too good to be true, it probably is,” Ebelo warned.
With financial fraud showing no signs of abating, the SEC is urging Nigerians to act responsibly, avoid emotional decisions, and prioritize long-term, regulated investments. The Commission says it will continue to intensify its public awareness campaigns, but investors must also play their part in protecting themselves.
For more information and to verify any investment firm, visit www.sec.gov.ng/cmos.
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