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The Securities and Exchange Commission (SEC) has declared that individuals and entities promoting or operating Ponzi schemes now face a minimum fine of N20 million, a 10-year prison sentence, or both, under the newly enacted Investments and Securities Act (ISA) 2025.
Speaking on the development, SEC Director-General, Dr. Emomotimi Agama, emphasized that the Act strengthens the regulatory framework governing Nigeria’s capital markets. Prior to this, SEC lacked the legal authority to prosecute Ponzi scheme operators, making it difficult to hold offenders accountable.
Stronger Enforcement to Protect Investors
Dr. Agama highlighted that beyond the N20 million fine, the SEC now has broader enforcement powers, including the recovery of profits or gains obtained through fraudulent schemes.
“The penalty is not just about the N20 million fine; any illegally acquired funds from defrauding Nigerians will be recovered. The goal is to impose sanctions severe enough to deter fraudulent activities,” he stated.
He noted that a lack of strict legal consequences in the past allowed Ponzi schemes to flourish, causing significant financial losses to unsuspecting Nigerians. With the new legal provisions, the SEC is now better positioned to safeguard investors, enhance market transparency, and ensure sustainable growth in Nigeria’s financial sector.
Aligning with International Best Practices
The ISA 2025 introduces several transformative reforms to bring Nigeria’s capital market operations in line with global standards. These include stricter compliance requirements, enhanced regulatory oversight, and stronger investor protections.
“Protecting investors is a fundamental responsibility of the SEC, and this law empowers us with stronger enforcement mechanisms to achieve that,” Dr. Agama added.
With these tighter regulations and severe penalties, the SEC aims to curb fraudulent financial schemes, boost confidence in Nigeria’s investment landscape, and ensure a more transparent capital market.
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