Ponzi Scheme Promoters to Face 10-Year Imprisonment Under New Investment Law

Lagos, Nigeria – Promoters of Ponzi schemes in Nigeria now risk a minimum of 10 years in prison, following the enactment of the Investment and Securities Act (ISA) 2025. The new legislation, signed into law by President Bola Ahmed Tinubu, has granted the Securities and Exchange Commission (SEC) greater authority to prosecute individuals involved in fraudulent investment schemes.

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Speaking on Arise TV on Tuesday, the Director-General of SEC, Mr. Emomotimi Agama, emphasized that the Commission previously lacked the legal backing to take decisive action against Ponzi scheme operators. However, with the new law in place, offenders will not only face lengthy jail terms but also substantial financial penalties.

N40 Million Fine and Asset Recovery

In addition to imprisonment, individuals found guilty of operating Ponzi schemes will be subjected to a N40 million penalty. Addressing concerns about whether the fine was sufficient compared to the vast sums often defrauded from victims, Agama clarified that it was just one of multiple punitive measures.

“The N40 million fine is not the only sanction. There will be disgorgement, meaning that any profits or gains acquired through fraudulent means will be recovered,” he explained.

According to him, the SEC will now have the capacity to track and reclaim illicit proceeds, ensuring victims receive restitution where possible. “It’s not just about the amount defrauded but about enforcing strict sanctions to deter future offenders,” he added.

Enhanced Regulatory Powers

Beyond prosecuting Ponzi scheme operators, the ISA 2025 has strengthened SEC’s overall regulatory capabilities. The Commission now has the legal authority to obtain and analyze telephone conversations and other relevant communications necessary for investigations.

Agama assured investors that the enhanced powers would bolster confidence in Nigeria’s financial markets. “With this new law, the SEC is fully equipped to eliminate fraudulent operators, ensuring a more secure and transparent investment environment,” he stated.

A New Era for Nigeria’s Capital Market

The passage of the ISA 2025 marks a significant milestone in Nigeria’s financial sector. By repealing the Investment and Securities Act No. 29 of 2007, the new legislation aligns the country’s capital market regulations with international best practices, particularly those set by the International Organization of Securities Commissions (IOSCO).

The SEC believes the reformed legal framework will strengthen investor protection, enhance regulatory oversight, and foster greater trust in Nigeria’s capital markets.


Copyright 2024 REPORT AFRIQUE (RA). Permission to use portions of this article is granted provided appropriate credits are given to www.reportafrique.com and other relevant sources. This Article is Fact-Checked. See Policy.
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