Ponzi Operators Face 10-Year Jail Under New Law

The Nigerian government has taken a decisive step in combating fraudulent financial schemes with the enactment of the Investments and Securities Act 2025, which grants the Securities and Exchange Commission (SEC) broader powers to prosecute operators of illegal investment programs, including Ponzi schemes.

Under the new law, individuals and entities running unlicensed or deceptive financial schemes face up to 10 years imprisonment, a minimum fine of N20 million, or both. The legislation replaces the outdated 2007 framework and introduces enforceable penalties that previously did not exist.

Dr. Emomotimi Agama, head of the SEC, said the agency now has the full backing of the law to initiate legal proceedings against offenders and recover funds obtained through fraudulent means. “We now have the authority to act swiftly and decisively. This isn’t just about punishing bad actors—it’s about deterring them from even starting,” he explained.

The SEC has already begun issuing warnings to the public about suspicious investment programs. Recent advisories have highlighted companies such as Promiseland Estates Limited, UYJ Multitrade Limited (also known as My Share), and speculative digital tokens like the meme-based $DAVIDO coin, which the Commission has flagged as high-risk and lacking in real financial value.

Dr. Agama praised President Tinubu for approving the new law, noting that it aligns Nigeria’s capital market governance with global best practices. He also emphasized the SEC’s plan to increase enforcement throughout 2025, including the suspension or revocation of licenses for non-compliant operators.

The Commission encouraged investors and market participants to fully understand the provisions of the new Act and to verify that any financial platform they engage with is duly registered and regulated.