The Securities and Exchange Commission (SEC) has announced stricter penalties for individuals and organizations involved in Ponzi schemes under the newly enacted Investments and Securities Act (ISA) 2025.
The new law stipulates a minimum prison sentence of 10 years and a fine of at least N20 million for offenders.
This marks a significant shift in Nigeria’s regulatory landscape, giving the SEC stronger enforcement powers to combat fraudulent investment schemes that have exploited millions of Nigerians.
SEC Director-General, Dr. Emomotimi Agama, noted that prior to the ISA 2025, the commission lacked the legal authority to effectively prosecute Ponzi scheme operators, allowing fraudsters to deceive investors with false promises of high returns.
However, with the new law in place, SEC now has the mandate to investigate, prosecute, and impose severe sanctions on individuals and entities engaged in illegal financial activities.
Beyond the jail term and fine, Agama revealed that additional penalties such as disgorgement would be enforced.
This means that fraudsters would be required to return all funds obtained through their schemes, ensuring victims receive compensation.
“The goal is not just to punish offenders but to establish a strong deterrent that discourages people from engaging in fraudulent financial activities,” Agama stated.
A key feature of the ISA 2025 is its enhanced enforcement mechanisms, including the ability for SEC to access phone records and electronic communications of suspected fraudsters
This provision strengthens the commission’s ability to track, investigate, and build solid cases against Ponzi scheme operators, ensuring they are brought to justice.
The SEC boss stressed that investor protection remains the priority of the new Act.
He acknowledged that many Nigerians have fallen victim to Ponzi schemes due to a lack of strong legal deterrents in the past.
With the new law, the SEC is now fully empowered to shut down fraudulent investment operations before they inflict widespread financial damage.
“We now have the legal backing to proactively clamp down on Ponzi schemes and prevent unsuspecting Nigerians from being deceived,” Agama assured.
