SEC WARNS OF UNREGISTERED OPERATORS BUT....

On August 30, this year the Securities and Exchange Commission of Nigeria (SEC Nigeria) warned the investing public to beware of unregistered persons trying to pose as capital market operators or promote unregistered schemes in Nigeria.

In two separate posts on its website on August 30, it named two such persons or schemes warning that they were not registered to engage in capital market activities.

It stated that one Mrs Oge C  Ottiwu of 118, Zik Avenue, Opposite Eke market Awka, Anambra engages in capital market activities for which she was not registered.

In another post it drew attention of the public to an online investment scheme tagged MMM Federal Republic of Nigeria (Nigeria.mmm.net) that promises investors 30% monthly return. It is also called "mutual aid financial network".

It explained that this scheme has no business model and was certainly a scam that hopes to pay the so-called 30% from peoples invested money until the inverted pyramid collapses.

SEC drew attention of the public to the Investment and Securities Act of 2007 that expressly demands that any one seeking to engage in any capital market activity or scheme must be registered with the commission before hand.

Unfortunately, two worries emerge from the alerts.

1) Was it not possible to arrest the woman in question or arrange for the blocking of the online scheme rather than just warning the public to beware?

2) How many of the potential investors who are likely to be trapped in these schemes have access to the internet or can access the SEC website?

Perhaps, because many inverted pyramid schemes appeared in the past and promptly collapsed, it is time to think of a more effective and proactive way to deal with them.

Comments

  1. Anonymous3 September 2016 at 15:42

    Every Investor in MMM has access to the internet. Every potential investor also has access. We have millions of smartphone users in Nigeria and virtually all of them are connected to the internet. That figure is outside those who will connect via their tablets, laptops and desktops. That said, MMM is a fully internet based scheme with no visible headoffice in Nigeria. So there is no way an arrest can be made. Its not an inverted pyramid scheme either because you are still expected t earn with or without referring more people to the scheme. I would suggest you do an depth study of MMM and fully understand how it works so you can be fully armed when it comes to advising people about it being good or bad.

    ReplyDelete
  2. HENATES3 September 2016 at 19:19

    You are right Mr anonymous but arrest was for the woman with identified address while blocking was for the MMM scheme. SEC was the one saying don't patronise them. I agree I may be poorly educated on mmm and pyramid scheme but that does detract from SEC position that it is illegal in Nigeria if not registered. Thanks for your comment.

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