Operators and promoters of Ponzi schemes in Nigeria now face stricter penalties, including a minimum fine of ₦20 million or a 10-year prison sentence, following the enactment of the Investments and Securities Act (ISA) 2025.
The Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, disclosed this in an interview in Abuja, emphasizing that the new legislation strengthens regulatory oversight, enhances investor protection, and introduces reforms aimed at fostering market integrity and sustainable growth.
Agama noted that prior to this law, the SEC lacked the authority to prosecute Ponzi scheme operators effectively. “With the new law, they now face a 10-year jail term and beyond,” he stated.
The Act stipulates a minimum ₦20 million fine for individuals or entities operating such fraudulent schemes. However, Agama clarified that this is only part of the broader penalties offenders could face. “It is not the entire amount that will be charged or sanctioned. Additional penalties will be imposed based on the circumstances of each case,” he explained.
A key provision of the ISA 2025 is the introduction of “disgorgement,” which ensures that any profits obtained from defrauding investors are recovered. “It’s not just about the scale of the fraud; it’s about enforcing sanctions that will deter people from engaging in such schemes in the first place,” Agama added.
The new law also grants the SEC expanded investigative powers, including access to phone records and other communication data, to track and prosecute Ponzi scheme operators. “Many Nigerians have fallen victim to these schemes due to the lack of strong deterrents. This Act introduces stringent measures to prevent such fraudulent activities from continuing,” he said.
The enactment of ISA 2025 reinforces the SEC’s role as the apex regulator of Nigeria’s capital market, ensuring investor protection, fair market operations, and alignment with international best practices. The Act also strengthens the SEC’s mandate to minimize systemic risks and enhance transparency in the financial sector.
