By Aduragbemi Omiyale
The Chief Economist of the Securities and Exchange Commission (SEC), Mr Okey Umeano, has advised investors not to fall for an investment promising to pay them 10 per cent or 20 per cent of the interest a month on the money they put into the business.
According to him, it is almost impossible to see any genuine investment that would give such a return on investment every month.
He said in an interview that SEC was making efforts to deal with Ponzi scheme operators and illegal fund managers, urging members of the public to assist the commission in bringing them to book by reporting them.
Mr Umeano disclosed that the new Investments and Securities Bill (ISB) has amended some of the provisions around Ponzi schemes, illegal fund managers, and certain unwholesome practices in the market to ensure that these practices no longer happen.
“This ISB is supposed to accommodate these new operators, these new instruments and new happenings in the market. The Act is now more up-to-date and in line with present happenings in Nigeria and at the global level.
“This Act also protects the investors more because we have made certain provisions in that Act that strengthens the SEC to ensure that they are better able to carry out their investor protection activities.
“Among other provisions, the bill prohibits the operation of Ponzi/pyramid schemes and other illegal investment schemes while prescribing a jail term of not less than 10 years for promoters of such schemes. This will strengthen the regulation of Ponzi schemes. We are going to go all out against the promoters of such Ponzi schemes,” he said.
He stressed that when a capital market product with mouthwatering interest is being advertised, especially, “When it is too good to be true, and it sounds too good to be true, it is probably not true.”
“There is a simple way to find out as the SEC website has a list of registered capital markets operators. Go to the SEC website, type in CMO search, and you will see a list of capital market operators that are registered and that are regulated.
“There is also another one that some of them started doing, the organization is registered, but they now create a side product that is not registered. We register both the organization and the products and check properly before parting with your hard-earned money.
“In the capital market, we do not allow capital market operators to promise fixed returns. Nobody knows what the market will give, and people will make some efforts, but nobody can for sure tell you I will make 10 per cent or 20 per cent every month for you.
“When people tell you if you bring in money, I will pay you this amount, but you have to bring in other people, you have to register other people, they are most likely to be using the money of those people to pay you, using your own to pay the person who brought you in, and that becomes the pyramid in Ponzi schemes work,” he stated.
