SEC DG: New law mandates 10-year jail term for Ponzi operators

The Director-General of the Securities and Exchange Commission (SEC), Mr. Emomotimi Agama, has announced that the newly enacted Investment and Securities Act (ISA) 2025, signed into law by President Bola Tinubu, grants the Commission the power to prosecute Ponzi scheme operators with a minimum sentence of 10 years imprisonment.

Speaking in an interview on Arise TV on Tuesday, Agama explained that prior to the enactment of the new law, the SEC lacked the legal backing to prosecute fraudulent investment promoters effectively.

“With the new law, they now face a 10-year jail term and beyond,” the SEC DG stated.

In addition to imprisonment, the new law imposes a fine of N40 million on individuals found guilty of operating Ponzi schemes. Addressing concerns that the fine may not be sufficient punishment for perpetrators who defraud investors of billions, Agama clarified that the N40 million penalty is only part of a broader set of sanctions.

“So, N40 million is not the entire penalty or the entire money that will be charged or sanctioned to any suspecting or any accused capital market or non-capital market operator,” he said.

He further explained that the law provides for disgorgement, ensuring that all illicit gains made from defrauding investors are recovered and returned to victims.

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“It is not about the quantum of the fraud, it is about sanctions that would deter people from even getting into it,” Agama noted.

Beyond the prosecutorial authority, the SEC DG emphasized that the ISA 2025 grants the Commission the power to obtain phone call records and other relevant communications necessary for investigating and prosecuting fraudulent operators.

“With this new law, the Commission now has all it needs to come against bad operators and bring succor to Nigerians,” Agama stated.

He added that the enforcement of the law would boost investor confidence by ensuring fraudulent actors are removed from the financial system, making Nigeria’s capital market more secure and attractive.

The signing of the ISA 2025 into law marks a significant milestone in Nigeria’s capital market reform. The new legislation replaces the Investments and Securities Act No. 29 of 2007 and introduces critical reforms to align the country’s investment framework with international best practices.

According to the SEC, the law expands the Commission’s regulatory powers to meet global standards set by the International Organization of Securities Commissions (IOSCO), reinforcing Nigeria’s commitment to maintaining a fair and transparent financial market.

With these reforms, the SEC aims to strengthen investor protection, eliminate fraudulent schemes, and enhance the credibility of Nigeria’s capital markets.