Infractions: SEC poised to tackle illegal Capital market operators, warns investors

*The Capital market regulatory Commission warns the investing public in Nigeria to be wary of unscrupulous, get-rich-quick schemes promising unrealistic returns on investment

Isola Moses | ConsumerConnect

In line with the regulator’s zero tolerance for market irregularities, the Securities and Exchange Commission (SEC), in Nigeria, has threatened to clamp down on questionable Capital market operators, especially managers of Ponzi schemes in the country.

Mr. Lamido Yuguda, Director-General of SEC, disclosed this development to capital market operators at the second post-Capital Market Committee (CMC), virtual press conference, Friday, August 13, 2021.

ConsumerConnect reports the Commission stated that it would remain committed to zero tolerance for market infractions.

Trading floor of the Nigerian Stock Exchange

According to Yuguda, the regulatory Commission would continue with the campaign against illegal operators in the capital market, especially Ponzi Schemes.

He said: “SEC has adopted multi-level engagements with media platforms and regulators of publicity agencies in order to curb the reach and activities of these illegal operators.

“While we continue our activities to resolve the complaints that have been forwarded to the Commission through the official channels, it is important to reiterate to the investing public to be wary of unscrupulous schemes that promised unrealistic returns on investment.

“We will like to use this opportunity to reiterate our commitment towards zero tolerance for market infractions.”

The SEFC Director-General stated: “We urge every Capital market operator to operate within the market functions approved for it by the commission.

“The commission will not hesitate to deal decisively with any operator who carries out any activity outside the function(s) approved for it by the commission,” he said.

According to Yuguda, “no capital market can grow without discipline and adherence to laid down rules and regulations.”

He pointed out that Ponzi Schemes are a big problem for the economy and the country in general.

“Every month, everyday, many of our citizens lost huge monies to Ponzi scheme operators and the commission has adopted a variety of measures,” said the Director-General.

On steps to tackle the challenges, he disclosed such measures include putting up the list of the authorised operators on SEC’s Web site, so that interested investors will to confirm that the scheme they intend to invest in is through a registered operator.

“We have engaged a number of regulators and a number of media platforms to ensure that the message is actually delivered to the public that any promised return that looks so generous should actually be suspicious.

“It is a continuous fight, we are not resting on our oars in this. These Ponzi Schemes are truly a cancer in our society and every hand must be on deck to fight this cancer,” Yuguda said.

Renewal of registration by Capital market operators

In a related development, SEC has issued an update on renewal of registration by capital market operators in Nigeria according to a notice on its Web site.

The Management of the Commission says it refers to its previous circulars and e-mail dated 28th June, 2021 on the renewal of registration of Capital Market Operators.

It stated: “Capital Market Operators are hereby informed that the Commission has re-opened its renewal portal (www.eportal.sec.gov.ng) to enable Operators that have not renewed their registration for 2021 to do so.

“The portal will remain open from 12th August 2021 to 31st August 2021. Please note however that penalties for late registration would continue to accrue from 1st May 2021.”

However, it warns Capital Market operators who fail to renew their registration within the referenced timeframe.

Besides monetary penalties for continuing violation, SEC warns such erring “operators will be suspended from operating in the market and may also be subject to further sanctions as deemed appropriate by the Commission.”

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