Deborah Akinyosoye
The Securities and Exchange Commission (SEC) has once again warned Nigerians against participating in Ponzi schemes, highlighting the financial and reputational damage caused by such fraudulent ventures.
Dr. Sa’ad Abdulsalam, Head of the SEC’s Enforcement Department, issued the warning on Thursday during a Capital Market Enlightenment Programme organised for the Capital Market Correspondents Association of Nigeria at the Commission’s office in Lagos.
Abdulsalam cited the collapse of the Mavrodi Mundial Movement (MMM) in 2016 as a major example, noting that over N18 billion was lost to the scheme. He added that by 2022, Nigerians had lost more than N300 billion to various Ponzi schemes over a five-year period, based on data from the Norrenberger Financial Investments scheme.
“There are many credible products for people to invest in. If you want a safe environment to invest in, you can invest in mutual funds. However, most people are seeking very high returns. That is why I see people patronising the Ponzi schemes,” Abdulsalam said.
He stressed the availability of regulated alternatives, including non-interest and Islamic mutual funds, and urged potential investors to conduct due diligence before committing 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,” he said.
Abdulsalam advised investors to verify the registration status of any company offering investment products.
“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 said.
He warned that Ponzi schemes not only result in financial losses but also erode confidence in the capital market and undermine the credibility of regulatory agencies.
“The erosion of market confidence caused by Ponzi schemes leads to significant volatility and reduced investor engagement. The fallout not only damages individual finances but also tarnishes the reputation of regulatory institutions tasked with protecting investor interests,” Abdulsalam added.
He noted that the continued spread of fraudulent investment platforms remains a serious challenge, as it weakens public trust in legitimate financial systems.