The Securities and Exchange Commission in Nigeria has expressed concerns over the appetite of Nigerians for investing in Ponzi schemes despite the availability of safer, regulated investment products in the country.
Speaking at the Capital Market Enlightenment Programme organised for the Capital Market Correspondents Association of Nigeria in Lagos on Thursday, the Head of the Enforcement Department at the Commission, Dr Sa’ad Abdulsalam, said that about 3 million Nigerians lost N18bn when the popular Ponzi scheme, Mavrodi Mundial Movement, aka MMM, crashed in 2016.
He disclosed that as of 2022, Nigerians had lost over N300bn in Ponzi schemes in five years, quoting a report generated by the Norrenberger Financial Investments scheme.
Abdulsalam noted that many Nigerians continue to fall victim to fraudulent schemes in search of unrealistic returns despite the numerous legitimate investment vehicles approved and supervised by the Commission.
“There are many credible products for people to invest in,” Abdulsalam said. “If you want a safe environment to invest in, you can invest in mutual funds. But most people are looking for very high returns. That is why I see people patronising the Ponzi schemes.”
He explained that the Commission continues to register fund management companies which, in turn, are expected to develop products that undergo regulatory vetting before being offered to the public.
He added that there were also non-interest funds for those who prefer them: “There are non-interest funds, Islamic mutual funds. They are there, and there are many. Just go to the internet; you will find them, you will see them, and you will see who is promoting those products.”
Abdulsalam advised potential investors to verify the legitimacy of investment offerings and promoters through the Commission.
“Check and confirm: is the person a registered operator? And if you want to confirm, send us an email. We will tell you the status,” he added.
GIK/APA