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By Chukwuma Umeorah
Ponzi scheme operators in Nigeria could face up to 10 years in prison or a fine of N20 million, or both, under the proposed Investments and Securities Bill (ISB) 2024, which aims to strengthen the nation’s financial regulatory framework.
The bill, currently before the National Assembly, explicitly prohibits Ponzi and pyramid schemes as well as other illegal investment operations as recommended by the Securities and Exchange Commission (SEC). The Commission emphasized that stiff penalties such as this was imperative in curbing the activities of illegal fund managers who prey on unsuspecting Nigerians.
During a recent public hearing in Abuja, Senate President, Godswill Akpabio, represented by Senator Binos Yaroe, praised the ISB 2024 as a transformative legislative tool for Nigeria’s economic future. He emphasized that by repealing the outdated Investment and Securities Act (ISA) of 2007, the bill aims to modernize Nigeria’s financial markets, increase transparency, and boost investor confidence.
Akpabio urged stakeholders to contribute meaningfully to the bill’s development, describing it as a critical step toward fostering a more robust and fair investment environment capable of competing on a global scale.
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“As we engage today, I urge you to approach with an open heart and discerning mind. The Senate remains committed to legislating for a thriving society, fostering growth and innovation, and protecting the interests of every citizen,” Akpabio affirmed.
On his part, the Chairman, Senate Committee on Capital Market, Osita Izunaso, further underscored the capital market’s essential role in driving long-term economic development. He noted the need for a strong legal framework that keeps pace with evolving global realities, especially as fintech and digital assets gain traction within the Nigerian financial landscape.
“Having operated the ISA 2007 over 15 years, it has, therefore, become apparent that the law requires holistic review in order to strengthen its existing provisions, remove ambiguities, introduce new provisions that would enhance the international competitiveness of the Nigerian capital market and reposition the market to more strategically fulfil its role as a critical segment of the Nigerian financial system,” he said.
Meanwhile, SEC Director-General, Emomotimi Agama highlighted that the bill also includes expanded protections for investors, mandating that the Investor Protection Fund (IPF) would provide compensation for financial losses from the cancellation or revocation of a member firm’s registration. This provision goes beyond the current law, which limits compensation to cases of bankruptcy, insolvency, or negligence by a firm.
In addition, the ISB 2024 introduces regulations for Commodity Exchanges and Warehouse Receipts, which Agama believes will play a crucial role in developing the Nigerian commodities ecosystem. “A world-class capital market is essential for any modern economy, and Nigeria’s economic diversification efforts hinge on this,” Agama explained, underscoring the importance of the ISB 2024 in building a competitive and resilient financial system.
