The Securities and Exchange Commission (SEC) has ordered unlicenced financial investment firms in the country offering schemes and products at unreasonably high returns, to close down immediately or face the law. It said the activities of these firms are in clear breach of various provisions of the Security Industry Act of 2016, Act 929. “…Close down or risk being caught on the wrong side of the law,” SEC ordered in a new public notice issued Friday to warn the Ponzi schemes operating illegally in the country as investment firms. According to SEC, it has taken note of the various activities of these unlincenced investment firms, which it labelled as “‘pyramid and ponzi schemes” It said these firms were taking advantage of the unsuspecting public through various advertising platforms to rip them off their life savings. “The unique selling proposition of theses schemes and products is the unreasonably high rates of return or interest per month or year promised the investor public,” it said. These firms, SEC observed, were promising investors guaranteed returns ranging from 6%, 10%, 20%, 40% to 70% monthly, translating into 72%, 120%, 240%, 480% and 840% a year respectively.
SEC said the high rates of promised interest are mostly dollar denominated, noting proper disclosure on the risk and the ability to pay are not made by these entities.