The financial services sector in 2021 recorded increase in the number of Ponzi schemes, contributing to local investors’ weak participation in the nation’s capital market. Kayode Tokede in this report highlights what the regulatory bodies, especially Securities and Exchange Commission (SEC) must do to tackle this financial pandemic
The apex capital market last year consistently reported cases of Ponzi schemes, warning investors to stay clear to avoid their fingers being burnt.
SEC last year disclosed that three million Nigerians lost N18 billion to Ponzi scheme operators as devastating impacts of the COVID-19 pandemic on the Nigerian economy, low-interest-rate environment, coupled with the increased use of online services to interact and transact, have helped the proliferation of Ponzi schemes through the offering of unrealistic returns on investment to unsuspecting investors.
As gathered by THISDAY, SEC in 2021 warned investors of more than five investment schemes, stating that these operators are not registered as Capital Market Operators (CMO) with the commission.
Specifically, SEC in May 2021 warned the public of the proposed launch of a Crowdyvest Halal Fund by Crowdyvest, an unregistered entity purporting to operate as a cooperative society.
The commission had issued a Cease and Desist Order on Crowdyvest to stop the launch and operations of the Crowdyvest Halal Fund and any other investment activity which involves…
