Economy
SEC Assures Ponzi Scheme Operators Sleepless Nights
By Aduragbemi Omiyale
Ponzi scheme operators have been promised many sleepless nights and be frustrated out of the capital market.
The Director-General of the Securities and Exchange Commission (SEC), Mr Lamido Yuguda, said relevant agencies would be partnered with to flush them out of the system.
Speaking over the weekend, Mr Yuguda urged Nigerians to only do business with registered capital market operators, who can be verified on the website of the commission.
“We have their list on the SEC website and we have always said that if you go to an operator or when an operator approaches you, you must confirm that he is a licensed operator with the SEC.
“We have our numbers on how to reach our offices in the zones and we have done a lot of sensitizations in terms of seminars, webinars all in an effort to discourage people from going to Ponzi schemes.
“Unfortunately, a lot of people continue to patronize this Ponzi schemes, we have had cases that have been reported to us, our enforcement department and the police unit have been on many of these cases that have been reported to us trying to resolve them,” the SEC DG was quoted as saying in a statement made available to Business Post.
Mr Yuguda emphasized that it is not very difficult to identify a Ponzi scheme as they usually promise unreasonably high returns just to lure people.
“I will like to use this opportunity to say that it is not very difficult to recognize a Ponzi scheme and the people that go to Ponzi scheme many of them are probably aware that there is a type of risk that they are taking because when somebody tells you that I will pay you a 10 per cent per month on your investments, that means if you invest a million naira, every month you get 10% of that which is N100,000.00. If you see something like this, it is probably too good to be true. Because when you compound the annual rate of return, you find out that it is way higher than any decent investments can give you.
“There are people who think they can be amongst the first people to go in and probably go out before it collapses but you may be taking a huge risk because you do not know if you are the first, maybe the 1000th and could be that it is your own money that could get trapped. It is important for investors to understand the tale-tell signs of a Ponzi scheme and to alert the commission if they need some clarity,” he said.
The SEC chief disclosed that the agency has been working with other agencies of the government in terms of reducing the access of Ponzi schemes to the advertising platforms, the print media or electronic media i.e. the radio and television.
“These collaborations are very important because Ponzi schemes are cancers to the capital market, a lot of money has been lost and it is unacceptable to continue to have this kind of investment losses by people.
“In terms of the synergies between the Commission and the law enforcement on the fight against Ponzi schemes, I can say that there is very good synergy and harmony between the SEC and the law enforcement agencies.
“It is worthy to mention that the SEC has a detachment of the Nigeria Police working directly with the SEC on capital market matters including Ponzi schemes and we have a good collaboration with the Nigerian Financial Intelligence Unit, the EFCC especially on the fight against money laundry and Ponzi schemes,” Mr Yuguda stated.
He stated that the commission has stepped up enlightenment on Ponzi schemes to ensure the message gets to the street while also working with various state government, local government and different agencies of government including non-governmental organizations to make sure that the message gets to the nooks and crannies of our country.
“This is something that is depriving a lot of households of hard earned money. Money that could be used for a lot of other meaningful activities and needs are now surrendered to fraudsters essentially. When they come to you trying to convince you, they actually come in the form of very honest people, giving you all sort of promises in terms of financial return but once they get your money the story begins to change,” he disclosed.
The DG reiterated the commission’s commitment to continue to strive and fulfil its mandate of protecting investors and creating an enabling environment for market operations.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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