The Director-General of the Securities and Exchange Commission, Mr. Emotimi Agama, has said that the new Investment and Securities Act (ISA 2025) recently signed by President Bola Tinubu has empowered the Commission to prosecute promoters of Ponzi schemes with a possible sentencing to at least 10 years imprisonment.
Agama stated this on Tuesday during an Arise TV interview, where he spoke extensively about the new ISA.
According to him, until now, the Commission had no legal backing to prosecute Ponzi scheme operators, adding that this had made it difficult to bring them to justice.
“With the new law, they now face a 10-year jail term and beyond,” the SEC DG stated.
N40 million penalty
Aside from the sentencing, Agama said anyone caught operating a Ponzi scheme in Nigeria would also be made to pay a N40 million penalty according to the law.
Responding to the question of whether the N40 million penalty would be enough punishment for someone who had defrauded people of billions, the SEC DG said:
“So, N40 million is not the entire penalty or the entire money that will be charged or sanctioned to any suspecting or any accused capital market or non-capital market operator.
“…it is just part of the penalties and or the sanctions that will be meted against such persons.
“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 much as possible.”
Other powers of SEC under the new law
Besides the prosecutorial power, Agama said the new ISA has also provided the SEC with the power to be able to obtain and request telephone conversations and all other conversations that are required to prosecute Ponzi scheme operators.
- According to him, with the new law, the Commission now has all it needs to come against bad operators and bring succor to Nigerians.
- He said this would also allow the Commission to get the “bad guys” out of the way and make sure that people are more confident and happier to invest in the Nigerian market, “knowing fully well that the investor protection responsibility of the SEC has now been enhanced.”
Backstory
Nairametrics recently reported that President Bola Ahmed Tinubu had signed into law the Investment and Securities Act (ISA) 2025, marking a major milestone in Nigeria’s capital market reform.
- The new legislation, which repeals the former Investments and Securities Act No. 29 of 2007, is aimed at strengthening the legal and regulatory framework for investments and capital market activities in the country.
- The enactment of the ISA 2025, according to the SEC, reaffirms its authority as the apex regulator of Nigeria’s capital markets and introduces significant reforms designed to align local operations with international best practices.
- One of the major achievements of the ISA 2025 is the expansion of the SEC’s regulatory powers to meet the standards of global bodies such as the International Organization of Securities Commissions (IOSCO).
