The continued activities of Ponzi schemes have been described as a threat to the protection of investors, the functioning of a fair and orderly financial market as well as the development of the economy at large.
Director-General of the Securities and Exchange Commission, Mr. Lamido Yuguda, stated this during the opening of a two-day webinar organised by the Attorney General Alliance-Africa in collaboration with the Securities and Exchange Commission on Tuesday.
Yuguda said the devastating impact of the Covid-19 pandemic on the Nigerian economy, the low-interest rate environment, coupled with the increased use of online services to interact and transact, has helped the proliferation of Ponzi schemes.
He said Ponzi schemes operators have capitalized on the harsh economic climate to offer unrealistic returns on investment to unsuspecting investors. These illegal schemes have also been able to solicit new investors and expand their operations through the increased use of online services.
Yuguda however, stated that the SEC has a statutory duty to promote investor education and the training of persons in the capital market, saying that the programme is organized in furtherance of that statutory mandate.
In his remarks, Mr. Markus Green, AGA-Africa Board member, stated that due to the pandemic, businesses are operated online and criminals have taken advantage to attract people to Ponzi schemes, adding that the seminar is timely in order to build capacity on how to track these schemes, apprehend the perpetrators and prosecute them.
He said “We bring in experts from the United States to combine with others in Africa for training on these activities and how to curb them. COVID-19 has changed the way we do business but it has not stopped us from our work”.
Also speaking, Mr. Abubakar Malami, Attorney General of the Federation and Minister of Justice, said there is no underlying investment for Ponzi scheme, so it can never deliver the returns on investment as promised.
Malami stated that they are fundamentally different from legitimate investment opportunities, as the perpetrators are simply fraudsters who take advantage of even the wealthy, intelligent, the sophisticated people.
