Ponzi Scheme Operators Face 10-Year Jail Term And ₦20 Million Fine Under New Law.
The Securities and Exchange Commission (SEC) has announced stricter penalties for promoters and operators of Ponzi schemes in Nigeria, following the enactment of the Investments and Securities Act (ISA) 2025.
Under the new law, individuals involved in fraudulent investment schemes face a minimum prison sentence of 10 years and a fine of no less than ₦20 million. This marks a significant shift in Nigeria’s regulatory framework, equipping the SEC with enhanced powers to crack down on fraudulent financial activities that have victimised millions of Nigerians.
The Director-General of the SEC, Dr Emomotimi Agama, noted that prior to the enactment of ISA 2025, the commission lacked the legal authority to effectively prosecute Ponzi scheme operators. This regulatory gap had allowed fraudsters to lure unsuspecting investors with promises of unrealistic returns.
“With the ISA 2025 now in effect, the SEC has been granted sweeping powers to investigate, prosecute, and impose severe penalties on those engaged in illegal financial schemes,” Agama stated.
In addition to the ₦20 million fine and mandatory 10-year imprisonment, the law introduces a disgorgement provision. This ensures that any funds obtained through fraudulent means must be fully recovered from convicted operators, providing restitution to victims.
“It is not just about the quantum of fraud; it is about creating a deterrent strong enough to prevent individuals from engaging in these illegal activities in the first place,” Agama emphasised.
A key highlight of the ISA 2025 is its expanded enforcement capabilities, allowing the SEC to access phone records and other electronic communications of suspected fraudsters. This provision strengthens the commission’s ability to track, investigate, and build solid cases against Ponzi scheme operators, ensuring they face the full weight of the law.
Investor protection remains central to the new Act, according to Agama. He stressed that the SEC is now better equipped to shield Nigerians from fraudulent investment schemes that prey on financial desperation and ignorance.
“We recognise that many Nigerians have fallen victim to Ponzi schemes because, in the past, there were no strong legal deterrents. With this law, the SEC now has the necessary backing to shut down these operations before they cause damage,” he affirmed.
The introduction of ISA 2025 signals a new era in Nigeria’s fight against financial fraud, reinforcing the government’s commitment to safeguarding investors and maintaining the integrity of the financial system.
