Nigeria Passes Investment and Securities Bill to Combat Ponzi Schemes and Protect Investors The Nigerian National Assembly has recently passed the Investment and Securities Bill, which aims to strengthen the country’s capital market and provide better protection for investors.
The bill includes stricter penalties for operators of illegal investment schemes, including Ponzi schemes, which have caused billions of naira in losses and undermined confidence in Nigeria’s investment climate.
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The new bill also prohibits Ponzi and pyramid schemes and prescribes severe penalties, including jail terms and asset forfeiture, for their promoters. With the passing of this bill, Nigeria hopes to transform its capital market, attract foreign investors, and boost investors’ confidence.
According to Nigeria’s Securities and Exchange Commission, three million Nigerians lost N18bn when the popular Ponzi scheme, Mavrodi Mundial Movement aka MMM, crashed in 2016.
As of 2022, Nigerians have lost over N300bn in Ponzi schemes in five years, according to a report generated by the Norrenberger Financial Investments scheme.
Promoters of Ponzi schemes will now face a jail term of not less than 10 years, and the bill also prescribes asset forfeiture and a fine of 10-20% of the amount of money collected from victims.
The Chairman of the House Committee on Capital Markets and Institutions, Babangida Ibrahim, stated that the ISB 2023 was capable of transforming the capital market, attracting foreign investors, and boosting investors’ confidence, among others.