Nigerians Have Lost Over N300bn to Ponzi Schemes - CIIA


Tuesday, September 21, 2021 / 9:54 AM / Oluwakemi Enitan Falayo for WebTV / Header Image Credit: LinkedIn; CIIA Nigeria


Nigerian investors have lost over N300bn to Ponzi schemes across various platforms in the country, operated by fake capital and financial market operators.


The President of the Association of Corporate and Individual Investment Advisers, CIIA, Mr. Akin Adeniyi, CIPM, disclosed this at a recent webinar that reviewed the theme "Ponzi: Plugging the Ills of Unregistered Fund Managers in Nigeria".

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He listed the following reasons for the surge in Ponzi schemes in Nigeria, which include; 

  1. The proliferation of firms and funds that are unregistered with the Securities and Exchange Commission (SEC)
  2. The Non-Membership of Fund managers with the FMAN
  3. Celebrity endorsement of  financial market products that are not regulated
  4. Media hype of financial market schemes not registered with SEC
  5. No investment reporting on advertised funds and investment schemes.
  6. No investment assets custodian for the funds and market products
  7. Aggressive advertising campaigns designed to extort people

Mr. Adeniyi also outlined why Nigerians should invest with suitable capital market operators with a proven track record and market values.

According to him, the investors should look out for the following characteristics;

  1. The Advisors investing approach
  2. Qualification of the investment expert
  3. Experience and expertise of the investment firm
  4. Type/basis of remuneration
  5. Registration with appropriate authorities
  6. The commitment of the investment firm to ethical and professional standards
  7. Type of relationship mandate or contract
  8. Confirmation of registration with SEC and reference checks.

The CIIA President further emphasized the need to build capacity,  innovate and provide incentives for legitimate investment schemes and initiatives in the Nigerian financial market.

He informed stakeholders that the Securities and Exchange Commission oversees the CIIA activities, which is the first legitimacy step. The investment analyst explained that registered advisers could be reached through their search code on the SEC website.

On his part, Mr. Okey Umeano, Chief Economist, SEC Nigeria speaking on why people fall into the trap of Ponzi Schemes, said the major pull factor is the "Investors Greed". He believed that when people are promised that they will get 25% return every month or week from their investments, they will be able to invest without proper scrutiny.

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In her contribution, Toyin Kekere-Ekun, CEO of Lotus Financial Services Limited, called for increased awareness of the patterns and dangers of the Ponzi schemes in the Nigerian financial market, which will equip Nigerian investors with the knowledge and insight on detecting and avoiding them.

For Osho Aderonke, Portfolio Manager, Utica Capital, the apex regulator, the Securities and Exchange Commission should drive an effective communication process with regulated entities and investors on Ponzi schemes and strengthen the regulatory process. She said licensed investments have a low-risk level in the market.

She added that the millennials should be engaged so that they can understand market activities and products, make the right investment decisions and be financially empowered.

Speaking further, Mr. Dele Ige, MD/CEO PAC Asset Management Limited, providing his perspective on how technology has been deployed to perpetrate Ponzi schemes, called for a system that ensures the country's proper registration of market operators.

He commended  SEC to create a surveillance unit that helps monitor online and various platforms in the market. Dele Ige also stated that the SEC 3 tier KYC system would assist investors in understanding how the market works.

The CEO PAC Asset Investment also mentioned that  SEC had blocked several reported Facebook Pages, Instagram, and other internet means used to extort people. He advised everyone to visit the SEC platform ( for the list of registered capital market operators before investing their money.

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Related News

  1. Ponzi Schemes: Plugging the Ills of Unregistered Fund Managers in Nigeria
  2. SEC Commences 100% Custody Requirement in CIS
  3. The Dangers of Ponzi Schemes and How to Identify One
  4. Why Millennials Should Be Cautious of Investing In Ponzi Schemes - Ebovi Wali
  5. SEC warns Nigerians on Ponzi Schemes
  6. Multi-Level Marketing and Ponzi Schemes Used To Cushion The Effect Of Economic Downturn.
  7. US SEC Issues Investor Alert on Digital Asset and "Crypto" Investment
  8. SEC Releases New Rules and Amendments on Collective Investment Schemes


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