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SEC to clamp down on illegal fund promoters

The Securities and Exchange Commission, SEC has said it will clamp down on illegal fund managers and ensure they are made to face the full…

The Securities and Exchange Commission, SEC has said it will clamp down on illegal fund managers and ensure they are made to face the full wrath of the law.

The commission’s Head, Corporate Communications, Mrs. Efe Ebelo, in a statement indicated that the Acting Director-General, Ms. Mary Uduk, disclosed this at the weekend in Abuja.

She noted that what the SEC had done apart from continuing to educate people, was to also go after the promoters of these schemes.

She stated: “We are stepping up our enforcement mechanisms to ensure that they are apprehended and their offices sealed off. So many of them are being prosecuted in courts, we have secured convictions for some, and we have closed down so many.

“We verify ownership and return monies collected by them to the owners. It’s a problem around the world and we can tackle the problem by educating the public, telling them the right investments to make and the right places to put in their money”, Uduk added.

The SEC boss advised the investing public to be wary of any investment that is proposing return levels that are unreasonably high and advised investors to ensure that the fund managers and the products they are offering are registered with the commission. Expatiating further the investment expert cautioned that “when people come to you and say that you can invest 50,000 naira today and in 2 hours you will get 200,000 naira tomorrow or get 50% in 2 hours know that its is a lie. No legal investment that pays investment that way.

“So what they must likely be doing is using your money to pay someone else and using someone’s money to pay you. It is important that we don’t engage in such investments” she advised.

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.

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