Ponzi Scheme Promoters are False Prophets of Investment Environment – SEC
For the umpteenth time, the Securities and Exchange Commission (SEC) has warned Nigerians not to patronise anyone or company proposing unreasonably high returns.
Acting Director General of the agency, Ms Mary Uduk, gave this caution, stressing that the capital market was properly positioned to attract Nigerians and provide benefits to Nigerians who invest therein.
The SEC chief described fraudsters or promoters of Ponzi schemes as the false prophets of the investment environment, who must be avoided like a plague.
Ms Uduk advised investors to carry out due diligence and only invest in companies registered by the apex capital market regulator.
According to her, SEC has been doing a lot in terms of investor education to assist people understand whatever issues they have around the capital market.
“But besides that, there are new products coming up every day in the Nigerian capital market. We have a lot of ethical funds, one of the safest areas to invest in is in Mutual Funds, Collective Investments Schemes and we encourage Nigerians to be part of these and others,” the SEC boss said at the weekend via a statement.
“There is the added and all-important purpose of ensuring that the gains of your participation, be these dividends, proceeds from share sales/transfers, etc. accrue to you seamlessly, without sweat and in the shortest time possible,” she said.
“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,” she added.
“These fraudsters or promoters of Ponzi Schemes are the false prophets of the investment environment, they are the ill wind that blows no good and at whose sight you must flee; they are to be avoided. This is one message you must keep spreading to family, friends, relations and acquaintances in order to save them from the agony of loss of their hard-earned money,” Ms Uduk was quoted further as saying in the statement.
She therefore, advised the general public to distance themselves from such schemes, adding, “Please note that anyone that subscribes to these illegal activities does so at their own risk.”
She also informed investors that the SEC was currently leading the entire capital market industry in an effort to migrate all shareholders to an e-dividend regime.
The essence of the e-Dividend Mandate Management System, according to her, is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend.
“Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others,” she said.
Ms Uduk stated that the e-dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.
Recall that the e-dividend registration exercise started on November 23, 2016.
Other initiatives by the SEC to ensure that Investors get the benefit from investing in the market, according to Ms Uduk include, Multiple Subscription Regularisation, Direct Cash Settlement, dematerialisation, National Investor Protection Fund, Recapitalisation of capital market operators, corporate governance scorecard, new rules for products innovation, development of commodity exchange, Collective Investment Schemes among others.