…Says new Act will bark, bite
By Chinwendu Obienyi
The Securities and Exchange Commission (SEC) has said that the recently enacted Investment and Securities Act (ISA) 2025 has empowered the commission to combat Ponzi schemes and other fraudulent investment activities.
According to the commission, with the Act now signed into law by President Bola Tinubu, the commission can now bark a s bike, just as he assured that promoters of Ponzi schemes face a minimum of 10 years imprisonment and a fine of N40 million, among other penalties.
Director General, SEC, Emomotimi Agama stated this yesterday during an Arise TV interview monitored by Daily Sun.
The SEC before the enacted act had no legal backing to prosecute Ponzi scheme operators and this has in many ways prevented the commission from bringing them to justice.
However, Agama said, “With the new law now, they now face a 10-year jail term and beyond”.
Responding to whether the fine would be enough punishment, Agama stated that the fine was just part of the penalties or sanctions that will be meted against such promoters.
“One of the basic things around sanctions is that there will be disgorgement, and disgorgement means that we are going to make sure that every profit and every gain that has been achieved in the process of defrauding Nigerians will be gotten back.
“It is not about the quantum of the fraud, it is about sanctions that would deter people from even getting into it. The new law provides the SEC the powers to be able to do that and even more to go after these people, bring them to book and make sure that we are able to restitute the citizens as long as possible”, the SEC DG said.
He also added that the SEC can now obtain evidence such as telephone conversations to prosecute offenders effectively. These powers, he stated, aim to deter fraudulent activities and enhance investor confidence in Nigeria’s capital market.
Highlighting the relaxation of stringent rules that previously hindered state governments and municipalities from accessing the market for capital raising, Agama opined that state governments were restricted by requirements tied to their previous year’s revenue, which created bottlenecks for developmental funding.
He emphasised that the new Act removes these barriers, enabling sub-national governments to raise funds more effectively for infrastructure and developmental projects and expressed optimism that this reform would allow states to leverage the capital market as an engine of economic growth, fostering broader benefits for citizens across Nigeria.
“If you do not allow state governments to raise needed capital, then they are not able to foster development within their states which is not a good thing. Hence, this is what we have done with the new ISA 2025, we have relaxed those rules in order to give access to state governments to be able raise capital for developmental purposes in order for the people of this country to reap the benefits of the capital market as it should be knowing fully well that the capital market is the barometer and the engine of growth for any thriving economy”, the SEC DG explained.
He added that the new Act aligns Nigeria’s regulatory framework with international best practices, positioning the country as a competitive investment destination.
“It is indeed heart-warming to see that the President understands the nature of the market and of course the ministers are all veterans of the capital market and so we understand that we all need to deal with the market segmentally in order to provide the avenues for more listings (as the market infrastructure is a complex system) to happen from the different cadres of the companies that wish to be listed on the exchange.
“So, that is actually what grew the idea of composite and non-composite exchanges in order to provide delination to the different exchanges that will be able to list companies from different pipelines that do exist. Clearly, the issue of difficult exit of investors is an issue for us and creating these composite structures will provide that exit easily who want to invest in the Nigerian market”