SEC Warns Against Unapproved Investments in Risevest and Stecs

SEC Issues Warning Against Unauthorized Investment Schemes in Risevest and Stecs

The Securities and Exchange Commission (SEC) has issued a serious advisory to the Nigerian public, cautioning against investments with Risevest (Victoria Island) Cooperative Multipurpose Society Limited and Stecs (Alausa) Multipurpose Cooperative Society, commonly referred to as Stecs.

In a circular released over the weekend from the SEC’s Abuja office, it was highlighted that neither Risevest nor Stecs possesses the registration or authorization necessary to operate within Nigeria’s capital market. The SEC stated that both entities are engaged in unapproved investment schemes that target unsuspecting individuals.

The Commission noted that it has become aware of Risevest’s promotional activities that invite the public to invest in various schemes. Similarly, it raised concerns about Stecs, which has been soliciting investments for its Stecs Commodity Mudarabah Investment Series I.

Public Advised to Avoid Unauthorized Investments

The SEC reiterated that both Risevest and Stecs lack the necessary registration to conduct business in Nigeria’s capital market, and their investment offerings have not received official approval. The Commission warned the public to refrain from engaging with either organization concerning any business related to the capital market.

The SEC emphasized the risks associated with investing in unregistered organizations, warning that such ventures expose individuals to the threat of fraud and potential financial loss. To safeguard against such risks, the Commission urged Nigerians to verify the registration credentials of any entity presenting investment opportunities via its official channels.

Reaffirming its commitment to protecting investors, the SEC stated that it remains vigilant in curtailing the operations of unauthorized entities within the market.

Risevest

Rise Vest Technologies Limited describes itself on its website as a technology firm providing financial services exclusively to Nigerian residents. The company claims that its investment products are available through affiliates and third-party partners managed by its Delaware-based parent company.

Reports that the SEC’s warning comes during a surge in promotional activities by Risevest across radios, billboards, and social media platforms encouraging Nigerians to invest.

In another development, a federal high court in Abuja previously granted the Central Bank of Nigeria (CBN) permission to freeze accounts linked to several fintech firms, including Rise Vest, due to investigations into “illegal foreign exchange transactions.” This legal action occurred in August 2021, resulting in the temporary freezing of accounts for 180 days.

The CBN, however, relaxed its restrictions in July 2023, directing banks to lift limitations on accounts belonging to 440 individuals and companies, including fintech enterprises such as Risevest, Bamboo, and others. The circular, signed by a former Director of Banking Supervision, A.M. Barau, instructed banks to promptly inform affected customers of this decision.

The SEC’s alert serves as a critical reminder for investors to exercise caution and conduct thorough due diligence before engaging with any investment schemes in Nigeria.