The Securities and Exchange Commission (SEC) has issued a fresh warning to Nigerians over the rising number of unregistered online investment platforms being aggressively promoted across social media, cautioning that many of them bear the hallmarks of Ponzi schemes.
The Commission raised concerns that fraudulent operators are increasingly leveraging platforms such as Facebook, Instagram, TikTok, WhatsApp, and Telegram to lure unsuspecting investors with promises of quick and unusually high returns.
According to the SEC, these schemes are not registered or licensed to operate within Nigeria’s capital market, making them illegal and highly risky for the investing public.
The regulator explained that most of the platforms follow a similar pattern typical of Ponzi operations, where returns paid to earlier investors are sourced from the deposits of new participants rather than from legitimate business activities. The SEC warned that such arrangements are unsustainable and often collapse abruptly, leaving investors with significant financial losses.
The Commission further noted that social media has become a major tool for fraudsters, who use targeted advertisements, influencer promotions, and referral incentives to create trust and urgency around fake investment opportunities. These tactics, it said, are designed to pressure victims into making quick financial commitments without proper verification.
Reiterating its stance, the SEC emphasized that only investment companies duly registered and regulated by the Commission are legally permitted to offer investment or advisory services in Nigeria. It urged members of the public to verify the registration status of any investment platform before committing funds.
The SEC also advised Nigerians to be cautious of schemes that guarantee fixed or unusually high returns, stressing that such promises are often unrealistic and should be treated as red flags for potential fraud.
The Commission assured that it remains committed to strengthening investor protection and continues to intensify surveillance and enforcement actions against illegal investment operators across the country.
In conclusion, the SEC urged Nigerians to remain vigilant and to report suspicious investment schemes, warning that prevention remains the most effective safeguard against financial fraud in the digital space.
