The Security and Exchange Commission (SEC) has described as troubling the activities of Ponzi Schemes to capital market investors.
SEC Director General, Lamido Yuguda, who said this at the 2nd virtual Capital Market Committee (CMC) press briefing on Friday in Abuja, added that daily potential investors continue to lose money to the illegal operators and it is not good for the economy.
Over the years, the Commission have continued to caution Nigerians about doing business with unverified entities.
The SEC DG said: “The Commission continues its campaign against illegal operators in the capital market, especially Ponzi Schemes and has adopted multi-level engagements with media platforms and regulators of publicity agencies in order to curb the reach and activities of these illegal operators. While we continue our activities to resolve the complaints that have been forwarded to the Commission through the official channels, it is important to reiterate to the investing public to be wary of unscrupulous schemes that promise unrealistic returns on investment.
“They are a big problem to the economy. We have put up structures that will enable investors check on our website whether such proposals are authentic. They are truly a cancer and all hands must be on deck to curb their activities.”
The SEC DG revealed that unclaimed dividend increased from 158.44 million in 2018 to 170 million in 2021. According to the DG, it is a huge challenge to the Commission especially with the introduction of the Bank Verification Number (BVN).
The SEC boss explained that the problem is the banking information as individuals provide false details when buying shares, enabling them to buy multiple subscriptions that make it almost impossible to track down the original buyer.
The SEC helmsman said the efforts are underway to resolve the issue of identity management in market.
He said, “We have problems with identity management in the Nigerian capital market and this is really one of the things the commission is trying to resolve.
“We have set up a high-powered committee to look at the issue, people bought shares under false names and multiple subscriptions.
“There is a problem with the process but there is a problem with us too as people because if you are buying securities using your own wealth; why will you use another persons name, why will you use a name that will not be traceable to you?
“This became an issue after the introduction of BVN because BVN is tied to only one name.
“We are optimistic that the outcome of this committee’s assignment would address the challenges of identity management and help resolve some of the issues we face in the areas of unclaimed dividend, direct cash settlement and multiple subscription.”
He urged operators to operate within the rules governing operations as the Commission will not hesitate to sanction operators market who broke the law.
“We will like to use this opportunity to reiterate our commitment towards zero tolerance for market infractions. We urge every capital market operator to operate within the market functions approved for it by the Commission. The Commission will not hesitate to deal decisively with any operator who carries out any activities outside the function(s) approved for it by the Commission. No capital market can grow without discipline and adherence to laid down Rules and Regulations,” he said.
