Nigerians Are Asked by the SEC to Report Any Suspected Ponzi Schemes.

The Securities and Exchange Commission has called on Nigerians to report any suspected illegal investment schemes to the commission for thorough investigation and appropriate action. In a notice released on Thursday to the investing public, the Commission cautioned that Ponzi investment schemes pose significant risks to the development of the capital market. This warning follows the recent case of CBEX, a digital investment platform deemed unregistered by the SEC, which promised investors a 100 percent profit after 30 days of alleged trading. Approximately 600,000 Nigerians who invested in this scheme found themselves ensnared, resulting in a staggering loss of N1.3 trillion after the Ponzi scheme collapsed. Additionally, MTS/Tofro defrauded over 12,000 Nigerians of billions of dollars on April 19, 2025, when all investors were locked out of the MTS trading platform. Investigations have revealed that similar MTS/Tofro platforms in other countries, such as Ghana, remain operational and functional, while Nigerian investors have been left vulnerable. In its latest advisory, the Commission alerted the public to the increasing threats and risks associated with Ponzi schemes, illegal investment activities, and unregistered digital asset platforms. It clarified that fraudulent entities and individuals continue to take advantage of unsuspecting investors through misleading promises of high returns, often using the appeal of digital assets to create a false sense of legitimacy. The public is strongly urged to exercise caution regarding investment opportunities that guarantee or promise unusually high returns with minimal or no risk. This includes unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes that have not undergone the necessary processes to obtain prior approval from the SEC. The SEC emphasizes that 'If it sounds too good to be true, it probably is.' The commission has advised prospective investors to perform comprehensive due diligence prior to making any investments and to confirm the registration status of the entity or individual presenting the investment opportunity via the SEC’s official website: https://sec.gov.ng/cmos. Section 196 (3) of the Investments and Securities Act, 2025 makes it a criminal offense to promote or operate unregistered or prohibited schemes. Such an infraction may result in a penalty of no less than N20 million or a prison sentence of 10 years, or both. The SEC has expressed its unwavering commitment to identifying and prosecuting violators to the fullest extent of the law. The notice concluded by encouraging the public to collaborate with the SEC in preserving the integrity of Nigeria's investment landscape by promptly reporting any suspected illegal investment schemes to the SEC.