SEC Nigeria Restates Commitment To Tackling Illegal Fund Managers

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Monday, January 27, 2020 / 8:00 AM / SEC Nigeria / Header Image Credit: Concise News

 

The Securities and Exchange Commission, SEC, has restarted its determination to go after illegal fund managers and ensure they face the wrath of the law.

 

Acting Director-General of the SEC, Mary Uduk, who stated this in an interview with journalists in Abuja at the weekend, said what the SEC had done apart from continuing to educate people is to also go after the promoters of these schemes. 

 

She said, "we are stepping up our enforcement mechanisms to ensure that they are apprehended and their offices sealed off. So many of them are in courts, we have secured convictions for some, and we have closed down so many. We verify ownership and return monies collected by them to the owners. It's a problem around the world, and we can tackle the problem by educating the public, telling them the right investments to make and the right places to put in their money."

 

Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.

 

Uduk, however, advised the investing public to be wary of any investment that is proposing return levels that are unreasonably high and advised investors to ensure that the fund managers and the products they offer are registered with the commission. 

 

"So when people come to you and say that you can invest N50,000 today and in 2 hours you will get N200,000 tomorrow or get 50% know that it is a lie. No legal investment that pays investment that way. So what they do is using your money to pay someone else and using someone's money to pay you. It is important that we don't engage in such investments."

 

"These fraudsters or promoters of Ponzi schemes are the false prophets of the investment environment; they are the ill wind that blows no good and at whose sight you must flee; they are to be avoided. The message of clean transactions is one message you must take home to family, friends, relations and acquaintances to save them from the agony of loss of their hard-earned money."

 

According to Uduk, such ventures have no tangible business model, as returns would be paid from other peoples' invested funds, making it a fraudulent investing scam.

 

The SEC boss, who restated the commission's resolve to make the capital market more user-friendly to boost investors' participation in the market, said the commission had done a lot in terms of education to increase investors' knowledge of the capital market and enable them to make informed investment decisions.

 

"There are new investible products in the Nigerian capital market. We have a lot of ethical funds. One of the safest areas to invest in is in mutual funds and collective investment schemes, and we encourage Nigerians to be part of these and others."

 

"The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value."

 

Besides, Uduk stated that the SEC's effort to migrate all shareholders to an e-dividend regime is to eradicate or reduce to the barest minimum the incidence of unclaimed dividends.

 

"Unclaimed dividend is an undesirable feature of the Nigerian capital market, which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money that should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy."

 

"It is a consequence of the bottlenecks that are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors' addresses, poor fidelity and human fallibility in dividend payment processes, amongst others."

 

According to her, "there is a gain in investing in the capital market and that is why we keep imploring investors to register for e-dividend and regularise their multiple Subscriptions so that they can benefit from their investments."

 


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Proshare Nigeria Pvt. Ltd.


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