The Securities & Exchange Commission (SEC), on Tuesday warned that promoters and operators of any prohibited scheme commits an offence punishable on conviction to a N20m penalty or 10-year imprisonment, or both under the newly signed Investments and Securities Act (ISA) 2025.
Speaking during an interview in Abuja, Director-General of the commission, Dr. Emomotimi Agama, said the goal of the new legislation is to strengthen the legal framework governing Nigeria’s capital market.
Furthermore, he said the new Act will better protect investors, and introduce reforms that will promote market integrity, transparency, and sustainable growth.
Previously, he lamented, the SEC lacked the legal power to prosecute Ponzi scheme operators, making it difficult to bring offenders to justice, adding that under the new law, anyone convicted for the offence faces a jail term of 10 years or more
Agama further explained that the Act stipulates a minimum fine of N20m for anyone operating a Ponzi scheme in Nigeria.
“So, N20 million is not the entire penalty or the entire money that will be charged or sanctioned to any suspecting or any accused capital market or non-capital market operator. It is just part of the penalties and or the sanctions that will be meted against such persons,” Agama explained.
The SEC DG said sanctions will include “disgorgement,” meaning that any profits or gains obtained from defrauding Nigerians will be recovered adding that “it is not about the quantum of the fraud, it is about sanctions that would deter people from even getting into it.”
Also, Agama said the new ISA has also provided the SEC with the power to obtain and request telephone and all other conversations required to Prosecute Ponzi operators.
“We recognize that a lot of Nigerians have fallen prey to these sponsor schemes and the reason why that is the case is because there were no sanctions. You know enough to deter them from doing this so what this Act has done is to introduce measures for Ponzi scheme operators and intending Ponzi scheme operators not to be able to do this again against the wish and will of Nigerians.
“Protecting the investors in Nigeria is a cardinal responsibility of the SEC and this law has provided the SEC with stronger powers to be able to do that. This law has also been able to provide the SEC the powers to be able to search phones and get phone records for people who are interested in dealing with Nigerians or interested in duping Nigerians. We are able to get these records and quickly provide enforcement actions for the people that are involved so for us it is limitless”, he added.
The landmark legislation strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.
The enactment of the ISA 2025 reaffirms the authority of the SEC as the apex regulatory authority of the Nigerian Capital Market as well as to regulate the market to ensure capital formation, the protection of investors, and maintenance of a fair, efficient and transparent market and reduction of systemic risks. The Act also introduces transformative provisions to further align Nigeria’s market operations with international best practice.
