The menu of available asset classes has been expanded to include Exchange Traded Funds. The market infrastructure has been modernised and strengthened with the platforms for over-the-counter now established.
Within the last few months, more illegal fund managers have adopted various strategies to collect money from would-be investors. Some of them engage in free seminars at their offices for people to learn more about their products and the money-making business. According to a finance theory, every form of investment comes with a certain level of risk. The only exception is investment in government securities such as Treasury Bills and Bonds, among others.
The payments made by several gullible investors at the base of the pyramid, are used to settle maturing obligations to those at the top. For the scam to be sustained, the base must be continuously expanded through aggressive recruitment of new entrants. It could also be recalled that one other prominent company MGB Global had around July this year, been sealed by the EFCC due to petitions by depositors whose demands for refunds could not be met by the company.
“The commission wishes to notify the investing public that the company is not licensed to carry out investments business of any type and as such its operations are illegal. “We want to ensure that people do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value.
Karawusa added that the SEC management was determined to address head-on the menace and further proliferation of Ponzi schemes in Nigeria. They also indicated a registration period of February 5 to 15, in one of their numerous notices directing all prospective customers to make deposits into their bank accounts.
The commission had established that the company’s activities also constituted an infraction of the Investments and Securities Act , 2007. The SEC therefore advises the public to exercise due diligence and caution in the course of making investment decisions adding that valid licence of lawful operators could be obtained on the commission’s website by members of the public to confirm the licences of firms with which they intend to carry out investment activities.
The commencement of the verification exercise is sequel to the appointment of joint administrators/trustees for Dantata Success and Profitable Company and in pursuant to section 13 and 173 of the Investment and Securities Act, and consequent to an Ex parte Order granted by the Federal High Court, Kano.
“The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value. “Again, government should make capital market more liquid so that people will not look for alternatives.” “For instance, I am not aware of any business venture that consistently generates 50 per cent net annual return on a yearly basis.
“The most appropriate way to checkmate Ponzi schemes is to create enough awareness of the modus operandi of such schemes so that the general public will understand that the rewards offered by Ponzi schemes are not sustainable and only serve as bait to attract uninformed investors.