SEC, NFIU Sign MoU against Fraudulent Transactions


Ndubuisi Francis in Abuja

The Securities and Exchange Commission (SEC) and the Nigerian Financial Intelligence Unit (NFIU) have signed a Memorandum of Understanding (MoU) with a pledge to collaborate in combating criminal tendencies in the Nigerian capital market and ensure that suspicious transactions are stamped out

This is coming as NFIU has initiated measures to ensure that shell companies are eliminated from the financial system.

Shell companies exist only on paper, without an office and no employees, but may have bank accounts or may hold passive investments or be the registered owners of assets.

According to Wikipedia, they may serve as vehicles for business transactions without having any significant assets or operations and are. sometimes used for illicit financial flows, tax evasion and avoidance and money laundering.

Acting Director General of the SEC, Ms. Mary Uduk who spoke in Abuja during the signing of the MoU with the NFIU, said the collaboration was necessary in order to close ranks in the face of insider dealings, re-awakening of Ponzi schemes, cybercrime and other fraudulent activities that have engulfed the market in the last few years.

A statement issued by the commission’s Head, Public Affairs, Efe Ebelo said Uduk noted that the SEC is paying close attention to digital transactions and was in the process of amending its rules to capture such transactions.

She disclosed that the commission already has regulations that prohibits shell companies from operating in the capital market and implored the NFIU to assist with solutions to track suspicious transactions as they occur.

“If we have solutions that will help us track transactions, it will reduce incidence of insider dealing greatly. We would be very willing to collaborate with you on that in our determination to ensure that our markets are efficient and transparent and all investors are protected,” Uduk said.

According to her,, some areas where the MoU seeks cooperation of both agencies include training, secondment of middle cadre officers between both organisations, cross border monitoring, repatriation of stolen funds from the capital market and prosecution of offenders, among others.

On the rising spate of Ponzi schemes in the country, Uduk stressed the need for more collaboration between both organisations and further sensitization to ensure unsuspecting Nigerians do not continue to lose their hard-earned money.

In his remarks, Director of NFIU, Mr. Modibbo Tukur, commended the SEC for the relationship that has existed between both organisations and assured that the NFIU would continue to play its part in ensuring that the financial system is safe for Nigerians to operate.

To this end, Tukur disclosed that the NFIU is making efforts to ensure that the financial system is rid of shell companies adding that for companies to exist, they should have physical addresses.

“If anyone establishes a company, it has to be a company indeed and we have to be firm on this. This has become more important now given the roll out of the ECOWAS single currency, because with that, we know that capital and investments will move across borders and it is a single currency. So we have to step up regulation to avoid fraudulent transactions.

“We will commence by September and some companies would have to be deregistered if they do not meet the criteria. We will publish the parameters and also give them enough time to regularise after which those that do not comply before the deadline will be shut down. If you have an empty company hanging in the system, it is a potential danger and we should not allow it to thrive” Tukur said.

Tukur stated that by the time the NFIU commences the due diligence on the shell companies, the information will be shared with the SEC for their further action and commended the SEC on its regulation that does not presently allow shell companies to operate in the capital market.

“Analysis would now be digital so the organisation would be able to share information on transactions as fast as possible adding that the capital market being a very sensitive one, care has to be taken on information dissemination to avoid disruptions,” he added.