Ponzi operators risk 10-year jail term, N20m fine - SEC - The Nation Newspaper (2025)

April 1, 2025 by Nduka Chiejina, Abuja

Promoters and operators of prohibited investment schemes are to face stricter penalties under the newly enacted Investments and Securities Act (ISA) 2025.

The law stipulates that individuals found guilty of running Ponzi schemes will be liable to a minimum fine of N20 million, a jail term of at least 10 years, or both.

A statement from the Securities and Exchange Commission (SEC) on Tuesday in Abuja confirmed that the Act is designed to strengthen the legal framework governing yhe capital market, enhance investor protection, and implement reforms that will uphold market integrity, transparency, and long-term growth.

SEC Director-General, Dr. Emomotimi Agama, explained that before the enactment and eventual signing of the ISA 2025, the Commission lacked the legal authority to prosecute Ponzi scheme operators effectively, making it difficult to hold offenders accountable. Under the new law, those convicted will face severe legal consequences, including extended jail terms beyond the minimum 10 years.

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Agama further clarified that the N20 million fine is only one part of the penalties that may be imposed.

Additional sanctions, including financial restitution and other punitive measures, will be applied to ensure that perpetrators are held fully accountable.

One of the critical provisions of the Act includes “disgorgement,” a legal measure that requires convicted individuals to return any illicit profits or gains acquired through fraudulent schemes.

According to Agama, the objective is not just to punish offenders but to create deterrent measures that discourage fraudulent activities in the capital market.

The new law also grants the SEC expanded investigative powers, including the authority to access and review telephone records and other communications necessary to prosecute Ponzi scheme operators. Agama noted that these provisions will empower the SEC to take swift enforcement actions against fraudulent actors.

Agama acknowledged that many Nigerians have fallen victim to Ponzi schemes due to the lack of stringent sanctions. The new law introduces measures aimed at preventing such schemes from thriving.

“Protecting investors is a core responsibility of the SEC, and this law strengthens our ability to fulfill that duty. We now have greater authority to obtain phone records and other vital evidence to track down individuals defrauding Nigerians. This law provides us with limitless enforcement capabilities,” he stated.

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Investments and Securities Act

Securities and Exchange Commission

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