SEC to move against resurgence of Ponzi schemes in Nigeria

Limited on a monthly basis, shows that Institutional Investors outperformed Retail Investors by 32 percent.

In the same token, an evaluation of domestic transactions in the month of October and the prior month of September 2021 revealed that retail transactions increased by 83.69 percent from N31.76 billion in September to N58.34 billion in October 2021. Correspondingly, the institutional composition of the domestic market increased by 81.03 percent from N62.04 billion in September to N112.31 billion in October 2021.

In the light of the above analysis from the market activities during the month of October, market investors and analysts are, notwithstanding, expecting that local investors which have continued to dominate the stock market will take positions ahead of the full-year earnings by next year.

However, as the market drives further into the final days of the trading year, some experts have said they look forward to seeing the performance of the stock market lag through till the close of the year in the absence of potential catalysts to trigger positive sentiment in the market.

THE SECU RITIES AND EXCHANGE COMMISSION (SEC) has lamented the resurgence of Ponzi schemes in Nigeria as Nigerians keep falling for the gimmicks and scams, and has vowed to continue cracking down various Ponzi schemes and any illegal fund managers in Nigeria.

Lamido Yuguda, the director-general, SEC, made the revelation during an enlightenment workshop and investor clinic with the Federal Ministry of Finance, Budget and National Planning and its agencies in Abuja.

According to Yuguda, “The Nigerian financial sector is experiencing a resurgence of Ponzi schemes and illegal fund managers. Thus, the commission is poised to continue to apply measures and seek the cooperation of relevant stakeholders to combat the activities of these unlawful schemes, which have undermined the reputation of our financial markets and dampened investors’ confidence, among other things.

“The SEC firmly believes that the Nigerian capital market can attain its potentials if market operators/participants contribute their respective quotas to the growth of the market,” he said, revealing how these illegal fund managers lure their subscribers with promises of huge and unjustifiable returns on investments, adding that the problem is a major concern for regulators in the financial sector.

Yuguda further expressed the capital market regulator’s commitment to ensuring and maintaining an environment enabled by the appropriate regulatory framework with timely and affordable access to the market, zero-tolerance for infractions, heightened investor confidence and awareness, innovative product development and good governance practices. He also spoke about the need to restore the confidence of investors and as well as improve the participation of retail investors in the capital market, as recent findings showed that the demographics of current investors showed that youths have shunned the market.