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The Securities and Exchange Commission (SEC) has stated that promoters and operators of Ponzi schemes in Nigeria now risk stricter penalties under the newly enacted Investments and Securities Act (ISA) 2025.
It prescribes a minimum fine of N20 million and a prison sentence of no less than 10 years for offenders. The new law marks a major shift in Nigeria’s regulatory framework, empowering the SEC to take decisive action against fraudulent investment schemes that have defrauded millions of Nigerians.
The Director-General of the SEC, Dr Emomotimi Agama, highlighted that before now, the commission lacked the legal authority to prosecute Ponzi scheme operators effectively.
According to him, the loophole allowed fraudsters to thrive, deceiving unsuspecting investors with promises of unrealistic returns. However, he stated that with the ISA 2025 now in effect, SEC has been granted sweeping powers to investigate, prosecute and impose severe penalties on those engaged in illegal financial schemes. Agama stated that additional sanctions, including disgorgement, would be enforced beyond the N20 million fine and the minimum 10-year prison term.
This means that any funds obtained through fraudulent schemes must be fully recovered from convicted operators, ensuring victims are not left empty-handed. “It is not just about the quantum of fraud; it is about creating a deterrent strong enough to prevent individuals from engaging in these illegal activities in the first place,” he said.
According to him, a major highlight of the ISA 2025 is its expanded enforcement capabilities, allowing the SEC to access phone records and other electronic communications of suspected fraudsters, adding that the provision enhances the commission’s ability to track, investigate and build solid cases against ponzi scheme operators, ensuring they face the full weight of the law.
The SEC boss emphasised that investor protection remained the cornerstone of the new Act. According to him, the agency is now better equipped to shield Nigerians from fraudulent investment schemes that prey on financial desperation and ignorance.
“We recognise that many Nigerians have fallen victim to Ponzi schemes because, in the past, there were no strong legal deterrents. With this law, the SEC now has the necessary backing to shut down these operations before they cause damage,” he stated.
