SEC Warns Investors against Illegal Capital Market Operator
BY Goddy Egene
The Securities and Exchange Commission (SEC) yesterday warned members of the investing public to stay away from Ruby Gold Ventures (Crypto Currency Investment), saying the company is operating illegally in the nation’s capital market.
SEC it did not register Ruby Gold Ventures to perform any function market, therefore its operations/activities in the market are therefore illegal.
“In view of the above, the investing public is hereby warned to stop and desist from dealing with the company in any capital market related business. Please note that any person who does capital market related business with the company and its promoters after this publication does so at his/her own risk,” SEC said.
This development is following a similar warning given by SEC against a Ponzi scheme, MMM Federal Republic of Nigeria,’ that is asking investors to invest, promising them a monthly return of 30 per cent.
SEC had last month warned investors to stay away from online fraudsters, who it said carries 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.
Worried by the gradual return of the Ponzi funds, some stakeholders had called on the SEC to collaborate with law enforcement agencies and other relevant bodies to stop the activities of online fraudsters who float unregistered funds to defraud investors.
For instance, 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 capitalising on the ignorance and greed of some investors to create apathy in the market,” Oguntayo said.