The Securities and Exchange Commission is set to apply a more aggressive approach in combating Ponzi schemes following the recent enactment of the Investment and Securities Act (ISA 2025), which President Bola Tinubu signed into law.
The new legal framework empowers the SEC to prosecute promoters of Ponzi schemes, with potential sentences of up to 10 years in prison.
SEC Director-General Emomotimi Agama revealed the new provisions during a Tuesday interview on Arise TV, emphasising the significance of the law in addressing the long-standing challenge of prosecuting Ponzi operators in Nigeria.
According to Agama, prior to the passage of the law, the SEC lacked the necessary legal backing to take action against Ponzi schemes, making it difficult to bring offenders to justice.
Under the ISA 2025, individuals caught running Ponzi schemes now face a minimum sentence of 10 years imprisonment, with fines of up to N40m.
Agama clarified, however, that the N40m penalty is only a part of the total sanctions, as additional financial restitution will be sought from those found guilty.
“One of the key aspects of the new law is the concept of disgorgement,” Agama explained.
“This means that all profits gained from defrauding Nigerians will be returned, regardless of the scale of the fraud. The aim is not just to penalise but to deter individuals from engaging in such activities,” he added.
The SEC’s expanded powers also include the authority to obtain critical evidence, such as telephone conversations and other communications, to assist in prosecuting Ponzi operators.
In his remarks, Agama stressed that the SEC is committed to utilising the new powers to ensure that Ponzi scheme operators are held accountable and that investors are compensated for their losses.
The Commission also aims to foster greater trust in Nigeria’s capital markets by deterring fraudulent activities.
The new legal framework is expected to enhance significantly the SEC’s ability to protect investors and curb fraudulent schemes in the financial sector.
The new legislation signed last week replaces the former Investments and Securities Act No. 29 of 2007 and is aimed at strengthening the legal and regulatory framework for investments and capital market activities in the country.
