January 20, 2022

Reps’ new bill prescribes 10 year jail terms for illegal Ponzi scheme promoters

Reps’ new bill prescribes 10 year jail terms for illegal Ponzi scheme promoters

…to make SEC apex capital market regulatory

By Levinus Nwabughiogu

Illegal promoters and operators of Ponzi/Pyramids Schemes in Nigeria are to get a 10 year jail terms in an upcoming bill of the House of Representatives.

The bill will also make the Securities and Exchange Commission (SEC) the apex regulatory body for the Nigerian Capital market.

Sponsored by Hon. Babangida Ibrahim (APC, Katsina), the bill essentially seeks to repeal the Investment and Securities Act, 2007 and enact the Investments and Securities Bill to establish Securities and Exchange Commission (SEC) as the highest regulatory body in the nation’s capital market.

READ ALSO: Ponzi: New Bill empowers SEC to sanction unregistered investment schemes

The bill which passed for second reading on Thursday will enable SEC to properly reegulate the capital market, ensure capital formation, protect the market to ensure capital formation, protect investors, maintain fair, efficient and transparent market and reduce systematic risks when passed into law.

Speaking during the debate, Ibrahim said “the Bill prohibits Ponzi/Pyramid Schemes as well as other illegal investment schemes and prescribes a jail term of not less than 10 years for promoters of such schemes. The Commission would also be empowered to shut down such prohibited investment schemes.

“We are enhancing provisions relating to efficient regulation of investment scheme. Recently they is a lot of complains by Nigerians to the extent the FG itself but some embargo on us accounts on Ponzi schemes. So as of the time of signing the current act, the ponzi scheme was not in existence in Nigeria. So we have to put some regulations to monitor them.

“The current ACT regulating the capital market is the securities and investments act of 2007. It was signed by the late Umaru Musa  when he was the President. If you calculate from 2007 to date it’s about 15 years. The current reality in the capital market requires that those regulations be improved to enable the regulators(SEC) to perform their optimum functions. That is why, we are revealing the ACT because that some essential part of the ACT requires amendments and also there is a need to introduce some new sessions of the ACT. The original ACT contains about 266 sessions but the current one contains about 351 sessions.”