The Securities and Exchange Commission (SEC) has raised renewed concerns over Nigerians’ persistent interest in Ponzi schemes, despite the availability of safer, regulated investment options.
Dr Sa’ad Abdulsalam, Head of the Enforcement Department at the SEC, made this observation on Thursday during a Capital Market Enlightenment Programme held for the Capital Market Correspondents Association of Nigeria at the Commission’s Lagos office.
According to the SEC, approximately three million Nigerians lost ₦18 billion when the popular Ponzi scheme, Mavrodi Mundial Movement (MMM), collapsed in 2016. By 2022, Nigerians had lost over ₦300 billion to Ponzi schemes over a five-year period, based on data from the Norrenberger Financial Investments scheme.
While advocating for heightened public awareness and thorough due diligence in investment choices, Abdulsalam observed that many Nigerians still fall prey to fraudulent schemes in pursuit of unrealistic returns, ignoring the legitimate investment vehicles regulated by the Commission.
“There are many credible products available for investment,” Abdulsalam stated. “If you seek a secure environment, you can invest in mutual funds. However, most people chase unusually high returns, which explains their involvement with Ponzi schemes.”
He explained that the SEC continues to register fund management firms, which must undergo rigorous regulatory scrutiny before offering their products to the public.
He also highlighted that non-interest funds, including Islamic mutual funds, are readily available for those who prefer them. “There are Islamic mutual funds and other non-interest products. They’re available—just search online and you’ll find them and their promoters,” he added.
Abdulsalam urged potential investors to confirm the legitimacy of both investment products and promoters through the Commission. “Verify whether the person is a registered operator. If in doubt, send us an email and we’ll confirm their status,” he advised.
He noted that the rising number of fraudulent investment schemes continues to damage public confidence in formal investment platforms.
“The erosion of market trust caused by Ponzi schemes results in greater volatility and declining investor participation,” he remarked. “Such outcomes not only harm individual finances but also undermine the credibility of regulatory bodies tasked with safeguarding investor interests.”
Abdulsalam stressed that the impact of Ponzi schemes extends beyond the capital market. He pointed out that the social and economic consequences are severe, with households often losing their life savings or borrowed funds, which deepens financial hardship and disrupts community stability.
“These losses aren’t just numbers on paper,” he said. “They signify broken trust, destroyed livelihoods, and rising poverty in affected areas.”
He also warned the public about the misuse of certificates from the Special Control Unit Against Money Laundering (SCUML), which some operators falsely present as proof of legitimacy. He clarified that although the certificate features the EFCC logo, it only signifies anti-money laundering compliance and does not serve as a business licence.
“People often assume that the EFCC endorses these operators because the SCUML certificate bears the EFCC logo. But EFCC has no affiliation with them—SCUML is merely a compliance unit,” he explained, noting that some businesses frame and display the certificate to mislead customers.
Abdulsalam disclosed that the SEC is currently engaging the EFCC on reviewing the SCUML certificate’s format, suggesting a transition to a digital or verifiable system for greater transparency.
Reaffirming its dedication to investor protection, the Commission urged Nigerians to stay vigilant and always verify any investment offer before committing their money.