SEC used N8bn of N9bn revenue to service staff — SENATE

By Obas Esiedesa, Abuja

The Securities and Exchange Commission (SEC) would in the nearest future be able impose stiffer punishment on promoters of Ponzi schemes and other unregistered investment schemes, if changes to its laws are passed by the National Assembly.

Under the proposed law, ‘A bill to repeal the Investment and Securities Act 2007 and to enact the Investments and Securities Act, 2021’ which passed the second reading at the floor of the House of Representatives yesterday, SEC will be empowered to address the challenges of Ponzi schemes.

Section 195 (1) of the Bill empowers SEC thus: “The Commission shall have the power to enter and seal up all prohibited schemes and shall obtain an Order of court to freeze and forfeit all assets of such schemes to the Federal Government of Nigeria. 

“(2)The cost and expenses incurred under subsection (1) above shall be a first charge from the funds and properties of the illegal scheme including assets of its owners, promoters and or managers, whether acquired legitimately or otherwise.“(3)   For the purposes of this Bill, “prohibited scheme” including those commonly known as a “Ponzi or Pyramid scheme” means: (a)  Any investment scheme that pays existing contributors with funds collected from new contributors to the scheme promising high returns with little or no risk: i)      Whether or not the scheme limits the number of persons who may participate therein, either expressly or by the application of conditions affecting the eligibility of a person to enter into, or receive compensation under the scheme; or ii)  Whether the scheme is operated at a physical address or through the internet or other electronic means. (b)  Any scheme where participants attempt to make money by recruiting new participants usually where: (i)      the promoter promises a high return in a short period of time, and (ii)   no genuine product or service is actually sold; or(iii) the primary emphasis is on recruiting new participants

“(4)   The promoter(s) and operator(s) of any entity engaged in a prohibited scheme commits an offence and is liable upon conviction to imprisonment for a term of ten (10) years or a fine of N5,000,000 or both”.

READ ALSO: ACF scribe berates Buhari’s performance on Security

The proposed law also creates a framework for the treatment of unclaimed dividends under the regulatory purview of the Commission.

Section 83 (1) states: “Unclaimed Dividends of public companies under the regulatory purview of the Commission shall be treated as prescribed under the Rules and Regulations made pursuant to this Bill.

“(2) It shall be unlawful for any person to treat unclaimed dividend as described in subsection (1) of this section in a manner other than as prescribed under the rules and regulations made pursuant to this bill.

“(3) Any person who contravenes this section or the rules and regulations made pursuant to this Bill commits an offence and is liable upon conviction to a fine of not less than N10,000,000 or to imprisonment for a term not less than 5 years or to both such fine and imprisonment.

“(3) In lieu of prosecution, the Commission may sanction a person who violates the provisions of this section and the rules and regulations made thereunder to a penalty of not less than N10,000,000 and N50,000 per day for every day the violation continues”.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.