Some Nigerians would still cringe at the mere mention of ‘Investment’. This is due to their exposure to the dubious schemes of fake investment platforms and Ponzi schemes.
Hence, as part of efforts in curbing this, a bill seeking the prohibition of Ponzi and Pyramid schemes has passed the second reading at the house of representatives. The bill also proposes a 10-year prison sentence for operators of the Ponzi and pyramid schemes.
The bill, which was sponsored by the Chairman, house committee on capital markets, Ibrahim Babangida, also seeks to repeal and re-enact the Nigerian Capital Market, Investments and Securities Act.
It is titled, ‘A Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as well as Regulation of the Market to Ensure Capital Formation, the Protection of the Market to Ensure Capital Formation, the Protection of Investors, Maintain Fair, Efficient and Transparent Market and Reduction of Systematic Risk; and for Related Matters.’
A Ponzi scheme is an investment fraud that pays existing investors with the money collected from new investors. The scheme generally leads victims to believe that their earnings are from genuine business investments, and therefore, can be sustained.
Regarded as one of the world’s largest Ponzi schemes of all time, the Mavrodi Mundial Moneybox (MMM) is a Russian-founded Ponzi scheme which left some Nigerians in despair at their lost “investments” after the company suddenly went into ‘extinction’ in 2017.
After MMM, a lot of other fake investment platforms have emerged and are still emerging, ripping Nigerians off their monies.
The bill, when passed into law, will enable SEC to properly regulate the capital market, ensure capital formation, protect the market to ensure capital formation, protect investors, maintain a fair, efficient and transparent market and reduce systematic risks.
According to Babangida, current trends in capital markets regulation have made it necessary to make major improvements to the Nigerian capital market, the Investments and Securities Act, Act No. 29 of 2007, which was initially signed into law by the late President Umar Musa Yar’adua in June 2007.
