SEC Warns Against Greed and Ignorance As Nigerians Lose Over ₦316bn to Ponzi Schemes
The Securities and Exchange Commission (SEC) has disclosed that Nigerians have collectively lost more than ₦316 billion to Ponzi schemes and illegal fund managers over the years. The Commission attributed the persistence of these scams to greed, ignorance, and poor financial awareness.
The revelation came from the Head of FinTech and Innovation Department, AbdulRasheed Dan-Abu, during the SEC Journalists’ Academy in Abuja, where he delivered a presentation on combating investment fraud.
Dan-Abu described Ponzi schemes as fraudulent operations that pay existing investors with funds collected from new ones rather than from legitimate business activities.
“These schemes don’t engage in any real business. They only use new investors’ money to pay earlier ones, and once the flow of new funds stops, the operators vanish,” he explained.
Greed and Desire for Quick Wealth Driving the Trend
Dan-Abu emphasized that the obsession with instant riches remains the major reason many Nigerians fall prey to investment scams.
“Everyone wants to become rich immediately. That’s why even well-educated people fall into these traps. Education alone doesn’t stop greed,” he said.
He cited infamous cases such as MMM Nigeria, which lured thousands of citizens with false promises of 30% monthly returns. Some victims reportedly reinvested even after its collapse.
Dan-Abu also recalled the New Nation Women in Oil scam, which deceived over 155,000 rural women by posing as a government-backed empowerment initiative.
“Many sold their homes and vehicles to invest because they believed it was real. It shows the danger of not asking questions,” he added.
Breakdown of Losses from Ponzi Schemes
According to data presented by the SEC, investors suffered major losses in several fraudulent schemes:
- Cow Lane and Durrell Nigeria Ltd – ₦100 million each
- Now-Now Alert – ₦235 million
- G-Circle Investment and Box Value Trading – ₦400 million each
- Yuan Dong – ₦900 million
- Dantata Success and Prof Coy – between ₦1.2 billion and ₦2 billion
- Famzi Intbiz – ₦2.5 billion
- Bara Finance – ₦3.5 billion
- Galaxy Construction and Transportation – ₦7 billion
- MMM Nigeria – ₦18 billion
- Nospecto Oil and Gas and other wonder banks – ₦106.9 billion
- A single ongoing investigation involves more than ₦174 billion.
Altogether, total losses are estimated between ₦315.24 billion and ₦316.04 billion, according to SEC analysis.
Social Media Scams on the Rise
Dan-Abu warned that scammers increasingly use social media and messaging platforms like WhatsApp to attract unsuspecting investors with unrealistic promises of high returns and low risks.
“No genuine business can deliver massive profits in a short time without risk. When you see such offers, it’s already a red flag,” he cautioned.
He urged Nigerians to always verify investment platforms on the SEC’s official website before committing funds.
“If it’s not registered with the SEC, it’s already illegal. Protect your hard-earned money,” he said.
Journalists Urged to Join the Fight Against Financial Scams
Dan-Abu also appealed to the media to play a stronger role in educating the public.
“If journalists write about this issue regularly, we can save thousands from falling victim. Tomorrow, it might be your friend, relative, or neighbour,” he noted.
He stressed that only public vigilance and collaboration can stop the spread of fraudulent investment operations.
SEC DG Calls for Stronger Oversight in Digital Asset Space
The Director-General of the SEC, Dr. Emomotimi Agama, reaffirmed that Nigeria must not lag behind in regulating digital assets. He emphasized that robust oversight is essential to protect investors and maintain confidence in the financial system.
Represented by the Head of External Relations, Efe Ebelo, Agama stated that digital assets have become a core part of modern finance, requiring transparency, accountability, and proper regulation.
“Regulation isn’t about restriction; it’s about trust. Innovation should promote progress, not exploitation,” he said.
He revealed that one-third of Nigerians now engage in crypto-related activities, but warned that this growth has increased the risk of scams, phishing attacks, and fake digital wallets.
The SEC’s 2022 digital asset rules establish clear licensing and compliance requirements for Virtual Asset Service Providers, including anti-money laundering standards and transaction transparency.
Agama added that the Commission is collaborating with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to freeze illicit accounts and recover stolen funds, while deploying blockchain analytics tools to trace suspicious transactions.
“The future of finance is digital — but it must remain ethical, transparent, and trustworthy,” he concluded.
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