The Director-General of the Securities and Exchange Commission (SEC), Emomotimi Agama, has announced that the newly enacted Investment and Securities Act (ISA 2025), signed by President Bola Tinubu, significantly strengthens the Commission’s ability to combat Ponzi schemes. Speaking with newsmen, Agama explained that the new law empowers the SEC to prosecute Ponzi scheme promoters, with potential prison sentences of at least 10 years. Previously, the SEC lacked the necessary legal framework to effectively pursue these operators, hindering efforts to bring them to justice.
In addition to imprisonment, the ISA 2025 imposes a ₦40 million penalty on individuals found guilty of operating Ponzi schemes. Agama clarified that this penalty is not the sole punishment. He emphasized that the SEC will also pursue disgorgement, ensuring that all profits and gains derived from defrauding Nigerians are recovered. The goal is to establish sanctions that deter such fraudulent activities, rather than simply addressing the magnitude of the fraud. The new law grants the SEC enhanced powers to pursue and prosecute these offenders, aiming to provide restitution to affected citizens.
Furthermore, the ISA 2025 equips the SEC with the authority to obtain and request telephone and other communication records necessary for prosecuting Ponzi scheme operators. Agama asserted that these new powers enable the Commission to effectively target and eliminate fraudulent operators, thereby increasing investor confidence in the Nigerian market. This enhanced investor protection is a key objective of the new legislation.
President Tinubu’s signing of the ISA 2025 represents a significant advancement in Nigeria’s capital market reform. Replacing the 2007 Investments and Securities Act, the new law aims to reinforce the legal and regulatory framework for investments and capital market activities in the country. The SEC views this enactment as a reaffirmation of its regulatory authority and a step towards aligning local operations with international best practices. Notably, the ISA 2025 expands the SEC’s regulatory powers to meet the standards set by global bodies like the International Organization of Securities Commissions (IOSCO).
