Nigerians
It has been revealed that many Nigerians have begun to patronize ponzi schemes in recent times.
Speaking on the issue, some capital market operators on Wednesday
attributed the return of investors to Ponzi schemes to the ongoing
economic recession in the country.
According to the News Agency of Nigeria, the capital market
operators revealed in Lagos that ignorance in a bid to make huge
returns, contributed to investors’ patronage of the scheme.
A Ponzi scheme is a fraudulent investment operation where the
operator, an individual or organisation, pays returns to its investors
from new capital paid to the operators by new investors, rather than
from profit earned through legitimate sources.
A pyramid scheme is a form of fraud similar in some ways to a Ponzi
scheme, relying as it does, on a mistaken belief in a nonexistent
financial reality.
Operators of Ponzi schemes usually entice new investors by offering
higher returns than other investments in form of short-term returns
that are either abnormally high or unusually consistent.
NAN reports that the Chief Executive Officer, SOFUNIX Investment
and Communications Limited, Mr. Sola Oni, said that people were easily
lured to the scheme due to the hardship in the country.
“As the economic recession bites harder, it is easy to lure
unsuspecting but gullible people to fall prey to these wonder schemes,’’ Oni said.
He said that there were two categories of investors that patronise the wonder schemes.
Oni explained that the first set were those who fall prey out of sheer ignorance and those who were taking uncalculated risk.
According to him, the desire to make abnormal profit is peculiar to the two categories.
He, however, called on the relevant authorities to intensify their
monitoring exercise and ensure that culprits face the wrath of the law.
“There should be more awareness creation on these schemes to prevent the innocent ones from falling victim,’’ Oni added.
Oni said that the Securities and Exchange Commission had enough rules that outlawed Ponzi Schemes.
The President, Progressive Shareholders Association of Nigeria, Mr.
Boniface Okezie, blamed Corporate Affairs Commission for the activities
of the scheme promoters in the country.
Okezie said there should be proper scrutiny before the registration
of any company by the commission, adding that regulators should clamp
down on these companies to protect innocent investors.
He called for proper enlightenment of investors through the mass
media, both print and electronic, to save innocent investors from
falling prey.
The SEC Director-General, Mr. Mounir Gwarzo, recently called on investors to be weary of Ponzi Schemes operating in the country.
Gwarzo said that even if the company was registered with SEC,
potential investors should endeavour to find out from the commission
whether the company’s activities had been approved by the commission.
He said the commission was collaborating with the police and other
relevant law enforcement agencies to check the activities of the
operators of such schemes.
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