Ponzi scheme promoters, operators face 10-year jail term, N40 million penalty – SEC DG

• Emomotimi Agama, the Director-General of the Securities and Exchange Commission, said Ponzi scheme promoters and operators face a 10-year jail term and a N40 million penalty
• He said this is in accordance with the new Investment and Securities Act (ISA 2025) signed by President Bola Tinubu on March 29
• Agama said the ISA would root out fraudsters in the capital market and restore investor confidence in Nigeria

The Director-General of the Securities and Exchange Commission (SEC), Emomotimi Agama, says promoters and operators of Ponzi schemes face at least 10 years imprisonment and operators will pay N40 million penalty.

This is following the new Investment and Securities Act (ISA 2025) signed by President Bola Tinubu on March 29, which has empowered the SEC to prosecute operators and promoters of Ponzi schemes.

Agama stated this during an Arise TV interview on Tuesday, April 1, where he discussed the new ISA.

He stated that until now, the commission had no legal backing to prosecute Ponzi scheme operators, which he said had made it difficult to bring them to justice.

“With the new law, they now face a 10-year jail term and beyond,” Agama stated.

Ponzi scheme operators face N40 million penalty 

The SEC DG further stated that aside from the 10-year sentencing, anyone caught operating a Ponzi scheme in Nigeria would also be made to pay a N40 million penalty according to the law.

In his response to the question of whether the N40 million penalty would be enough punishment for someone who had defrauded people of billions, Agama said the ponzi scheme operators would be made to pay back every profit made from defrauding Nigerians.

“So N40 million is not the entire penalty or the entire money that will be charged or sanctioned to any suspecting or any accused capital market or non-capital market operator.  

“…it is just part of the penalties and or the sanctions that will be meted against such persons. 

“One of the basic things around sanctions is that there will be disgorgement, and disgorgement means that we are going to make sure that every profit and every gain that has been achieved in the process of defrauding Nigerians will be gotten back.  

“It is not about the quantum of the fraud, it is about sanctions that would deter people from even getting into it.  

“The new law provides the SEC the powers to be able to do that and even more to go after these people, bring them to book and make sure that we are able to restitute the citizens as long as much as possible,” he said. 

ISA would restore investor confidence in Nigeria

Agama added that beyond prosecutorial power, the new ISA has also empowered the SEC to be able to obtain and request telephone conversations and all other conversations that are required to prosecute Ponzi scheme operators.

He said the new law has given the commission all it needs to come against bad operators and bring succour to Nigerians.

The SEC DG added that this would also restore the confidence of investors in the Nigerian market “knowing fully well that the investor protection responsibility of the SEC has now been enhanced.” 

ISA 2025 aims to strengthen Nigeria’s capital market

Recall that President Tinubu signed into law the ISA 2025, which repeals the former Investments and Securities Act No. 29 of 2007 and aims to strengthen the legal and regulatory framework for investments and capital market activities in the country.

The new legislation marks a major milestone in Nigeria’s capital market reform and reaffirms the authority of the SEC as the apex regulator of Nigeria’s capital markets.

The ISA 2025 introduces significant reforms designed to align local operations with international best practices, one of which is the expansion of the SEC’s regulatory powers to meet the standards of global bodies such as the International Organisation of Securities Commissions (IOSCO).

SEC plans tougher actions against Ponzi schemes in 2025, commits to enhancing investor confidence

Meanwhile, TheRadar earlier reported that the Securities and Exchange Commission (SEC) vowed to intensify its efforts to eliminate Ponzi and pyramid schemes in 2025, creating a more secure environment for legitimate investment opportunities to flourish.

SEC Director-General, Dr Emomotimi Agama, in his New Year address to the capital market community on Sunday, January 5, emphasised that protecting investors remains central to the commission’s mission.