Nigerians have been cautioned by the Securities and Exchange Commission not to invest in unregistered online investment programs that are being advertised on social media platforms, as many of them function similarly to Ponzi schemes.
The commission stated that it had noticed a rise in fraudulent investment advertising on Facebook, Instagram, Telegram, WhatsApp, and TikTok in a public notification posted on its X handle on Thursday, May 14. “The growing promotion of unregistered online investment schemes on social media applications and websites has caught the attention of the Securities and Exchange Commission,” the SEC said.
The commission claims that many of the schemes entice gullible Nigerians with guarantees or unrealistic returns.
The notification further stated that “many of these investment schemes exhibit characteristics of Ponzi or prohibited investment schemes, while some operators of such schemes also provide unauthorized investment services to members of the public.”
The SEC emphasized that a number of the online platforms that are currently in use are neither registered nor permitted to conduct business in Nigeria’s capital market. Additionally, the commission cautioned Nigerians not to trust financial advice from people or organizations that do not hold a license from the regulatory body.
It stated that “only SEC-registered operators are authorized to provide investment and advisory services in Nigeria.” Before investing money, the public was recommended by the regulator to confirm the registration status of any company or investment platform.
It further cautioned that investors are frequently exposed to fraud and significant financial losses by schemes that promise abnormally large or guaranteed earnings. The most recent alert coincides with mounting worries about the proliferation of online Ponzi schemes and digital financial frauds that target Nigerians via social media and online platforms.
