{"id":51279,"date":"2021-08-13T21:46:48","date_gmt":"2021-08-13T20:46:48","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=51279"},"modified":"2021-08-14T02:52:38","modified_gmt":"2021-08-14T01:52:38","slug":"n18-billion-ponzi-fraud-sec-caution-investors-on-high-yielding-investment-schemes","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/n18-billion-ponzi-fraud-sec-caution-investors-on-high-yielding-investment-schemes\/","title":{"rendered":"N18 Billion Ponzi Fraud: SEC Caution Investors On High Yielding Investment Schemes"},"content":{"rendered":"

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Against investors\u2019 quest for higher yielding investment schemes, the Securities and Exchange Commission (SEC), has warned that, it\u2019s majorly a ploy by Ponzi scheme operators at deceiving unsuspecting investors and defrauding them of their money.<\/p>\n

Also, the Commission has reiterated its zero tolerance for infraction in the domestic capital market, noting that, it will not hesitate to deal decisively with any operator who carries out any activities outside the function(s) approved for it by the Commission.<\/p>\n

Ponzi schemes are fraudulent investing scams which generate returns for early investors with money taken from later investors. They are similar to pyramid schemes in that both are based on using new investors\u2019 funds to pay the earlier backers.<\/p>\n

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SEC DG Mr. Lamido Yuguda<\/figcaption><\/figure>\n

Addressing the media community on Friday during a virtual meeting, after its 2nd post Capital Market Committee Meeting (CMC) for the year, held on Thursday, the SEC Director-General, Mr. Lamido Yuguda said the menace of Ponzi scheme has become a hydra headed economic albatross that must not be allowed to thrive.<\/p>\n

It will be recall that, following the collapse of the MMM Ponzi scheme, the Nigerian Deposit Insurance Corporation had estimated that over three million Nigerians lost about N18billion over three million Nigerians have lost about N18billion through Ponzi schemes.<\/p>\n

The SEC DG who said Ponzi schemes operate with unsustainable operating models that ultimately lead to huge losses for investors, noted that, a two minutes check on the commissions\u2019 website would have saved investors the huge investment loss.<\/p>\n

According to Yuguda, \u201cthe Commission continues its campaign against illegal operators in the capital market, especially Ponzi Schemes and has adopted multi-level engagements with media platforms and regulators of publicity agencies in order to curb the reach and activities of these illegal operators. While we continue our activities to resolve the complaints that have been forwarded to the Commission through the official channels, it is important to reiterate to the investing public to be wary of unscrupulous schemes that promise unrealistic returns on investment.\u201d<\/p>\n

\u201cWe will like to use this opportunity to reiterate our commitment towards zero tolerance for market infractions. We urge every capital market operator to operate within the market functions approved for it by the Commission. The Commission will not hesitate to deal decisively with any operator who carries out any\u00a0activities outside the function(s) approved for it by the Commission. No capital market can grow without discipline and adherence to laid down Rules and Regulations.<\/p>\n

Speaking on the unclaimed dividend in the capital market, the SEC DG who frowned at the current value which stood at N170 billion up from N158 billion in 2019, despite the Commission\u2019s drive to reduce the numbers, explained that poor identity management, multiple subscriptions of investors and peri<\/span>od of lockdown of the economy during the Covid 19 pandemic contributed to the increase.<\/span><\/p>\n

He said as part of measures to increase the number of mandated investors on the e-DMMS and reduce the quantum of unclaimed dividends, members of the CMC adopted the following measures:<\/p>\n

i.\u00a0Automation for mandating to e-DMMS<\/p>\n

ii.\u00a0Increase monitoring of adherence to procedures<\/p>\n

iii.\u00a0Increase awareness campaigns on the initiative<\/p>

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Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

iv.\u00a0A training session to be organized by the Central Securities Clearing System (CSCS); who will be supported by the e-DMMS\u00a0technical committee, institute of Capital Market Registrars (ICMR) and Association of Securities Dealing Houses of Nigeria (ASHON).<\/p>\n

v.\u00a0Conduct of a study to determine the suitability of the CSCS to process dividends of investors in unlisted companies.<\/p>\n

On other major highlights of the CMC meeting, Yaguda said \u201cthe Commission recently issued a circular to the public on the commencement of its Regulatory incubation process. \u00a0I am glad to inform you that the Commission has registered\u00a0two\u00a0Fintech Capital Market Operators, which include a Digital\u00a0Fund\u00a0Portfolio\u00a0Manager\u00a0and a Digital Sub-broker.\u00a0We look forward to registering more Fintech players in our market.<\/p>\n

\u201cThe Commission\u00a0has\u00a0approved\u00a0some\u00a0derivative contracts, developed\u00a0the regulatory framework for\u00a0derivatives tradingas well as rules on\u00a0Interoperability of Central Securities Depositories\u00a0in Nigeria. We have\u00a0also\u00a0registered some\u00a0Central Counterparty Clearing Houses\u00a0(CCP).\u00a0Furthermore,\u00a0we\u00a0wish\u00a0to reiterate\u00a0our\u00a0stance on mandatory compliance\u00a0with the Crowdfunding\u00a0Rules as violators would be adequately sanctioned.<\/p>\n

\u201cAs part of measures to deepen the commodities ecosystem, the Commission held engagements with\u00a0the\u00a0National Insurance Commission (NAICOM)\u00a0towards\u00a0de-risking\u00a0and insuring\u00a0certain commodity assets, which we believe will attract\u00a0more investments within the space,\u00a0particularly from the Pensions industry. A technical committee was also constituted comprising representatives\u00a0of the Commission,\u00a0Standards Organization of Nigeria (SON), AFEX,\u00a0Lagos Commodities and Futures Exchange (LCFE)\u00a0&\u00a0Nigerian Commodities Exchange (NCX)\u00a0to deliver agro-based standards within 3 months.<\/p>\n

\u201cTo develop an effective price discovery mechanism for the commodities ecosystem, the Commission has\u00a0equally\u00a0solicited the support of the National Bureau of Statistics(NBS). A technical committee has been constituted for this purpose with the mandate of developing\u00a0modalities for this exercise.<\/p>\n

\u201cIn June 2021 the Commission constituted a Committee on Identity Management for the Nigerian Capital Market. The committee is chaired by Mr.\u00a0Aigboje\u00a0Aig-Imoukhuede\u00a0and is expected to harmonize various databases of investors, and facilitate data accuracy in the market. We are optimistic that the outcome of this committee\u2019s assignment would\u00a0address the\u00a0challenges of identity management and help resolve some of the issues we face in the areas of unclaimed dividend, direct cash settlement and multiple subscriptions.<\/p>\n

\u201cIt would interest the market to note that the Commission has recently extended the due date for renewal of registration. Consequently, the registration portal has been reopened until August 31, 2021.\u00a0This is to enable operators that are yet to update their information with the Commission do\u00a0so before the end of the new deadline.<\/p>\n

\u201cFurthermore, the Federal Inland Revenue Services (FIRS) has proposed the guideline for tax neutrality of\u00a0non-interest instruments.\u00a0It is expected that the\u00a0document\u00a0would become\u00a0effective\u00a0before the end of the year to help\u00a0further\u00a0deepen the non-interest segment of the market.<\/p>\n

\u201cTremendous progress has been made with regards to securing the passage of the securitization bill. The commission is working closely with the FSS 2020 to adopt an approach that would ensure smooth passage of the bill.<\/p>\n

\u201cThe Commission\u00a0acknowledges\u00a0the critical role the capital market can play in long term financing of infrastructure in the country and will continue to work with relevant stakeholders to unlock the use of capital market instruments in funding key infrastructure needs especially in roads, housing and clean energy\u201d, he added.<\/p>\n

\n<\/p>","protected":false},"excerpt":{"rendered":"

Against investors\u2019 quest for high yielding investment schemes, the Securities and Exchange Commission (SEC), has warned that, it\u2019s majorly a ploy by Ponzi scheme operators at deceiving unsuspecting investors and defrauding them of their money.<\/p>\n","protected":false},"author":6,"featured_media":50478,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[576,7420,996,4282],"coauthors":[2391],"class_list":["post-51279","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-news","tag-capital-market","tag-mr-lamido-yuguda","tag-ponzi-scheme","tag-stock-market"],"yoast_head":"\nN18 Billion Ponzi Fraud: SEC Caution Investors On High Yielding Investment Schemes - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/n18-billion-ponzi-fraud-sec-caution-investors-on-high-yielding-investment-schemes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"N18 Billion Ponzi Fraud: SEC Caution Investors On High Yielding Investment Schemes - 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