The Securities and Exchange Commission (SEC) has warned the public against investing in illegal online schemes widely promoted on social media, stating that many of them exhibit signs of Ponzi and other prohibited investment operations.
In a public notice issued on Thursday, the Commission said it had observed “the increasing promotion of unregistered online investment schemes on social media applications and websites, including WhatsApp, Instagram, Telegram, Facebook, TikTok and other digital platforms.”
According to the SEC, “many of these investment schemes exhibit characteristics of Ponzi or Prohibited investment schemes, while some operators of such schemes also provide unauthorised investment services to members of the public.”
It urged Nigerians to avoid platforms that promise unusually high or guaranteed returns, warning that such claims are often linked to fraud.
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“Accordingly, the Commission hereby advises the public to refrain from investing or participating in any unregistered online investment platform or scheme promising unrealistic or guaranteed returns,” it stated.
The Commission also cautioned investors against relying on advice shared by unregistered individuals or groups online.
“Members of the public are further advised not to rely on investment advisories circulated through online platforms by persons or entities not registered by the Commission, as reliance on such advisories may expose investors to significant financial losses and fraudulent schemes,” the SEC maintained.
The Commission reminded the public that under the Investments and Securities Act, 2025, only entities registered by the SEC are allowed to promote investment services, provide investment advice, or raise funds from the public in Nigeria’s capital market.
It urged prospective investors to confirm the registration status of any company or platform before investing, advising them to use the SEC Fintech Registered Operators Portal and the SEC CMOs Portal to verify authorised operators.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X