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Stakeholders Want SEC to Move against Ponzi Scheme Operators

By Goddy Egene
Some stakeholders in the Nigerian capital market have called on the Securities and Exchange Commission to collaborate with law enforcement agencies and other relevant bodies to stop the activities of online fraudsters who float unregistered funds to defraud investors.

There is currently one investment fund tagged ‘MMM Federal Republic of Nigeria,’ that is asking investors to invest, promising them a monthly return of 30 per cent.
Although SEC had warned the investing public to stay away from against the MMM but the operators of the fund are still calling on unsuspecting investors for patronage.

However, an investor, Mr. Moses Igbrude of Independent Shareholders Association of Nigeria (ISAN) told THISDAY that SEC should work with law enforcement agencies and the Nigerian Communication Commission (NCC) and track those behind the fund and bring them to book before gullible investor fall victim.

“It is a good thing SEC has alerted members of the investing public to stay away from the illegal fund managers but some gullible investors can still be attracted by the unrealistic return they are being promised. At the end of the day, the regulators will still get the blame. I therefore think SEC should work with other organisations, track down those behind the MMM and bring them to book,” Igbrude said.

A lawyer and stockbroker, Mr. Ayo Oguntayo said he was surprised that some investors are still patronising Ponzi schemes given the bad experiences and losses suffered in the past by many investors.

“My candid advice is that investors should be very careful of the fund they patronise. We have genuine funds registered by SEC and listed in the market. There are funds that are focused on equities, there are those that invest in bond and there those that target real estate. These are safer than some fraudsters capitalizing on the ignorance and greed of some investors to create apathy in the market. We also have the Fund Managers Association of Nigeria, which is the body for all fund and asset managers in the country. From there investors can know the genuine funds in the market,” Oguntayo said.

SEC had last month warned investors to stay away from online fraudsters, who it said carry out their illegitimate business via Nigeria.mmm.net portal and are promising investors a monthly investment return of 30 per cent.

The regulator noted that the venture has no tangible business model as returns would be paid from other people’s invested funds making it a Ponzi scheme. SEC explained that it is a fraudulent investing scam promising high rates of return with little risk to investors that generates returns for older investors by acquiring new investors.