Securities and Exchange Commission
The Securities and Exchange Commission (SEC) has again warned Nigerians against investing in schemes that offer unreasonable returns and not approved by the commission.The Acting Director-General of SEC, Ms. Mary Uduk while speaking on current initiatives to move the market forward during a Town Hall meeting held in Port Harcourt, Rivers State, on Wednesday, said the investing public must be wary of any investment that is proposing return levels that are unreasonably high.
Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.
According to her, such ventures have no tangible business model as returns would be paid from other peoples’ invested funds making it a fraudulent investing scam.Uduk added that even if the commission had approved the company’s activities, investors must ensure that the fund managers and the products they are offering are registered with the SEC.
Read Also:
The SEC boss restated the commission’s resolve to make the capital market more user-friendly to boost investors’ participation in the market.“These fraudsters or promoters of Ponzi Schemes are the false prophets of the investment environment, they are the ill-wind that blows no good and at whose sight you must flee; they are to be avoided. This is one message you must take home to family, friends, relations and acquaintances in order to save them from the agony of loss of their hard–earned money” she stated.
Uduk also used the occasion to inform investors that SEC is currently leading the entire capital market industry in an effort to migrate all shareholders to an e –Dividend regime.
According to her, the essence of the e-Dividend mandate management system is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend.“Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others”, she added. She added that the e-Dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.
Source: G Business
