The Securities and Exchange Commission (SEC) says the investments and securities bill (ISB) 2024 is proposing a penalty of not less than N20 million or 10 years imprisonment or both for ponzi scheme operators.
Emomotimi Agama, director-general of SEC, spoke at the public hearing of the bill on Thursday in Abuja.
Agama said the bill also prescribed stringent jail terms and other stiff sanctions for the promoters of ponzi schemes.
He said the commission introduced an express prohibition of ponzi and pyramid schemes and other illegal investment schemes to prevent illicit fund managers from fleecing unsuspecting Nigerians of their funds.
Agama also said the commission had observed areas which required review in the ISB 2007 to strengthen existing provisions, remove ambiguities, and introduce new provisions that would enhance the international competitiveness of the Nigerian capital market.
“A vital provision in the bill is the new stipulation that the Investor Protection Fund (IPF) set up by the securities exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm,” he said.
“In the extant law, compensation from the IPF is limited to instances of ‘bankruptcy’, ‘insolvency’ or other acts of ‘negligence’ by a dealing member firm.
“This bill also contains an entirely new part which provides for the regulation of Commodity Exchanges and Warehouse Receipts.
“These provisions are essential for the development of the entire Commodities ecosystem.
“There is no doubt that Nigeria needs and deserves a world-class capital market to facilitate on-going economic diversification.
“The passage and enactment of the Investments and Securities Bill will be a pivotal step in this direction.”
