The Securities and Exchange Commission, SEC, has announced that Nigerians have lost about N316bn to Ponzi schemes and illegal fund managers over the years. The commission recently warned that greed and ignorance are responsible for sustaining the menace.
Speaking at a journalists’ academy, a training organised by the commission for finance journalists, in Abuja, while presenting a paper on combating investment fraud, the Head of FinTech and Innovation Department at the Commission, AbdulRasheed Dan-Abu, described Ponzi schemes as fraudulent investment operations that pay returns to old investors from money collected from new entrants instead of from any genuine business activity.
According to him, the burning desire for instant wealth has made many Nigerians fall into the trap of the scammers involved, and the trend must stop to prevent more losses.
He stated that it is sad to confirm that the people who fall victim are more educated than the perpetrators.
“These schemes are not really doing anything. They are just collecting people’s money and using it to pay the initial investors. At some point, when there are no new investors, the whole thing crashes and the operators disappear.
Everybody just wants to get rich today. That is actually what makes people fall into this trap. Even the people who are greedy now are more educated than those who experienced Charles Ponzi’s first scheme. Education has not stopped greed,” he said.
He recalled how notorious schemes like MMM Nigeria deceived lots of desperate citizens with promises of 30 per cent monthly returns.
AbdulRasheed concluded by saying that MMM had a stronghold on so many victims that some even reinvested after the collapse.
“Even after MMM shut down, they came back and told people that if you pay a certain amount, you will get access to your lost money. People still paid. That shows you how greed blinds people.
Many sold their houses and cars to invest because they believed it was real. It tells you how dangerous this thing is when people do not ask questions.
They promise high returns with little or no risk. But there is no business in the world where you can make a lot of money in a short time without risk. It is not possible.
Anytime you see an investment that looks new, the first thing you should do is ask if it is registered with the SEC. It is your sweat, your hard-earned money. If it is not registered, it is already illegal.
The press can really help us. If you write about this once a week, you could save thousands of people. Tomorrow, it might be your son, your cousin or your neighbour. It is not about foolishness; it depends on who the victim spoke to and what he believed,” he added.
