Ponzi Scheme Operators in Nigeria Face 10-Year Jail Term Under New Securities Act
The Director-General of the Securities and Exchange Commission (SEC), Mr. Emomotimi Agama, has announced that the newly signed Investment and Securities Act (ISA) 2025 grants the Commission the legal authority to prosecute Ponzi scheme operators in Nigeria. Under the new law, fraudulent investment promoters now face a minimum of 10 years imprisonment, along with additional penalties.
New Law Empowers SEC to Take Action
Speaking in an interview on Arise TV on Tuesday, Agama stated that prior to the enactment of the ISA 2025, the SEC lacked the legal framework to prosecute Ponzi scheme promoters effectively. However, with the new law in place, the Commission now has the authority to prosecute, sanction, and penalize those involved in fraudulent financial schemes.
“With the new law, they now face a 10-year jail term and beyond,” the SEC DG emphasized.
N40 Million Penalty and Full Restitution for Victims
Beyond imprisonment, Agama revealed that offenders would also be subject to a ₦40 million fine. However, he clarified that this fine is not the only financial penalty violators will face.
“So, ₦40 million is not the entire penalty or the full amount that will be charged or sanctioned against a suspect. There will also be disgorgement, meaning that every ill-gotten profit and every gain obtained from defrauding Nigerians will be recovered,” he explained.
He added that the objective of the new law is not just punitive but also to serve as a deterrent, preventing potential fraudsters from engaging in fraudulent schemes.
SEC Now Has Power to Track Communications of Fraudsters
In addition to its prosecutorial authority, the Investment and Securities Act 2025 grants the SEC the power to obtain and request telephone conversations and other communications needed for investigations.
According to Agama, this provision will help the SEC in tracking and prosecuting fraudulent investment operators, thereby boosting investor confidence in the Nigerian financial market.
“This new law gives us all the tools we need to go after bad actors in the investment space. It allows us to remove them from the system and make sure that Nigerians are confident and happy to invest,” he stated.
Background: ISA 2025 and Nigeria’s Capital Market Reform
The Investment and Securities Act (ISA) 2025 was recently signed into law by President Bola Ahmed Tinubu, replacing the Investment and Securities Act No. 29 of 2007. This marks a significant milestone in Nigeria’s capital market reform, strengthening the country’s legal and regulatory framework for investment and capital market activities.
According to the SEC, the enactment of the ISA 2025 solidifies its authority as the primary regulator of Nigeria’s capital markets. Additionally, it aligns local investment operations with international best practices and expands the SEC’s regulatory powers to meet the standards of the International Organization of Securities Commissions (IOSCO).
Conclusion
With the enactment of the Investment and Securities Act 2025, the SEC now has the legal authority to prosecute Ponzi scheme operators, impose strict penalties, and ensure full restitution for victims. This reform is expected to restore investor confidence, strengthen financial security, and curb fraudulent investment practices in Nigeria.
