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By Daniel Adaji
Promoters of Ponzi schemes in Nigeria now face severe legal consequences, including a minimum of 10 years in prison and a fine of N40M, following the enactment of the Investment and Securities Act (ISA) 2025.
The newly signed law grants the Securities and Exchange Commission the authority to prosecute individuals involved in fraudulent investment schemes.
The Director-General of SEC, Mr. Emomotimi Agama, disclosed this during an interview on Arise TV on Tuesday. According to him, the Commission had previously lacked the legal backing to prosecute Ponzi scheme operators, making it difficult to bring them to justice.
“With the new law, they now face a 10-year jail term and beyond,” Agama stated.
In addition to imprisonment, the SEC DG emphasised that individuals caught operating Ponzi schemes would be subjected to an N40m penalty, reinforcing the government’s commitment to curbing fraudulent financial activities.
“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,” he said.
He clarified that the enforcement of the law would include disgorgement, a legal process ensuring that all illicit profits gained from defrauding Nigerians are recovered.
“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,” he said.
Agama stressed that the primary goal is to deter individuals from engaging in fraudulent schemes, saying, “It is not about the quantum of the fraud, it is about sanctions that would deter people from even getting into it.”
Beyond the ability to prosecute, the new ISA also grants the SEC broader investigative powers, including access to telephone records and other communications relevant to prosecuting offenders.
“With the new law, the Commission now has all it needs to come against bad operators and bring succour to Nigerians,” Agama noted. He added that these provisions would help the SEC eliminate fraudulent actors and restore investor confidence in Nigeria’s capital market.
The signing of ISA 2025 by President Bola Tinubu marks a significant milestone in Nigeria’s financial regulatory framework.
The law replaces the former Investments and Securities Act No. 29 of 2007, aligning local investment regulations with international standards.
With its expanded powers, the SEC is now better positioned to protect investors and maintain a transparent and trustworthy capital market.
“Knowing fully well that the investor protection responsibility of the SEC has now been enhanced,” Agama added.