SEC proposes N20 million fine, jail term for Ponzi scheme operators

The Securities and Exchange Commission (SEC) says the Investments and Securities Bill (ISB) 2024 proposes a penalty of not less than N20 million or 10 years’ imprisonment or both for Ponzi scheme operators.
The director-general of SEC, Emomotimi Agama, said this at the public hearing of the bill on Thursday in Abuja.
Mr Agama said the bill also prescribed stringent jail terms and other stiff sanctions for the promoters of Ponzi schemes.
He said the SEC introduced an express prohibition of Ponzi/Pyramid Schemes and other illegal investment schemes to ensure that illegal fund managers were not allowed to fleece unsuspecting Nigerians of their funds.
Mr Agama said the commission had observed areas that required review in the ISB 2007 to strengthen existing provisions, remove ambiguities, and introduce new provisions that would enhance the international competitiveness of the Nigerian capital market.
He said the move was to reposition the market to catalyse national economic transformation.
”A vital provision in the bill is the new stipulation that the Investor Protection Fund (IPF) set up by the securities exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm.
“In the extant law, compensation from the IPF is limited to instances of ‘bankruptcy,’ ‘insolvency,’ or other acts of ‘negligence’ by a dealing member firm.
“This bill also contains an entirely new part that provides for the regulation of commodity exchanges and warehouse receipts.
“The passage and enactment of the Investments and Securities Bill will be a pivotal step in this direction,” he said.
In his remarks, Senate President Godswill Akpabio said the ISB 2024 was a beacon of hope for the nation’s economic landscape.
Mr Akpabio, represented by Senator Binos Yaroe, said the country was taking a bold step towards modernising its financial market and fostering transparency by repealing the ISB Act 2007.
He said the bill was designed to create a more robust and equitable environment for investments to thrive in an increasingly competitive global economy.
“Together, we can ensure that the ISB 2024 is not just a piece of legislation but a transformative tool that propels Nigeria towards a future of economic resilience and prosperity,” Mr Akpabio said.
The chairman of the Senate Committee on Capital Market, Osita Izunaso, said a well-developed capital market, which served as the bedrock for long-term capital raising and industrial development, was imperative.
Mr Izunaso said the capital market required a strong legal framework that conformed with ever-evolving societal and global realities.
(NAN)
We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.
More from Peoples Gazette

Agriculture
FG tasks ECOWAS on leveraging financing strategies for agroecology
The federal government has urged stakeholders in the agriculture and finance sectors in the West Africa region to leverage financing strategies to enhance agroecology practices

Politics
Katsina youths pledge to deliver over 2 million votes to Atiku
“Katsina State is Atiku’s political base because it is his second home.”

States
Benue govt engages ex-servicemen in state security outfit to curb crimes
The Benue government has engaged the services of veterans from the military, the police, and the civil defence corps in the state Civil Protection Guard.

Sport
Five-time Olympian Edem announces retirement from table tennis national team
Edem has consistently been in African and international table tennis competitions for over a decade.

Economy
FG proposes N47.9 trillion budget for 2025
Mr Bagudu said the budget proposal included new borrowings of N9.2 trillion to finance the budget deficit in 2025.

States
Ogun declares Friday work-free for local government elections
Governor Dapo Abiodun approved the work-free day to enable civil and public servants to participate fully in the local government elections.

States
Ondo Guber: Don’t relax yet, Aiyedatiwa begs supporters ahead of Saturday’s poll
Mr Aiyedatiwa said the remaining hours before the election should be used to intensify the mobilisation drive towards delivering victory for the party.

NationWide
NCC moves to simplify voice, data plans to enhance transparency
Mr Adinde disclosed that NCC would limit tariff plans to seven per operator, ensuring clarity and ease of choice for consumers.