Proposed bill against Ponzi schemes in the country by the Security and Exchange Commission, SEC prescribes a 10-year jail term for operators, the magazine has learned.
If passed by the National Assembly, the Investments and Security Bills, ISB will also reduce the activities of Ponzi schemes operators, SEC, has said.
“Ponzi schemes operate with unsustainable operating models that ultimately lead to huge losses for investors. Following the collapse of the MMM Ponzi scheme, the Nigerian Deposit Insurance Corporation (NDIC) had estimated that over 3 million Nigerians lost about N18 billion Naira.
“ Several other illegal investment schemes have cost Nigerians their assets and life savings,” SEC said last year.
According to checks by the magazine, the harsh economic situations in the country have exposed not a few Nigerians to speculative and dubious schemes.
A report by Norrenberger Financial Investments, said in the last five years, about N300 billion have been lost to Ponzi schemes in Nigeria.
The potential of losing their money has however not stopped many Nigerians from investing in such schemes this year. Experts say the figure is likely to rise this year as more Nigerians seek to escape the economic headwinds.
But, the Director General of SEC, Lamido Yuguda said the proposed legislation seeks to tackle the hydra-headed problem of Ponzi schemes where Nigerians lose their hard-earned money.
He urged the National Assembly to ensure the quick passage of the bill, which according to him will boost the economy.
Yuguda disclosed this in a statement on Sunday in Abuja, saying the target of the bill is to grow the nation’s financial sector.
He explained that the bill will also enhance the competitiveness of the nation’s capital market, as well as boost the diversification efforts of the federal government.
Yguda said “the bill introduces an express prohibition of Ponzi/pyramid schemes as well as other illegal investment schemes.
”The bill also prescribes a jail term of not less than 10 years for promoters of such schemes.
”It expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors.
”Minor reviews on various sections of the extant law have been carried out to provide greater clarity.”
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