Reps mulls introduction of 10-year jail term for operators of Ponzi schemes

The House of Reps on Thursday, January 20, debated a bill stating that illegal promoters and operators of Ponzi/Pyramids Schemes in Nigeria are to get a 10-year jail term.

The Reps bill will also make the Securities and Exchange Commission (SEC) the apex regulatory body for the Nigerian Capital market.

Sponsored by Hon. Babangida Ibrahim (APC, Katsina), the bill essentially seeks to repeal the Investment and Securities Act, 2007 and enact the Investments and Securities Bill to establish Securities and Exchange Commission (SEC) as the highest regulatory body in the nation’s capital market.

The bill which passed for second reading during Reps plenary will enable SEC to properly regulate the capital market, ensure capital formation, protect the market to ensure capital formation, protect investors, maintain fair, efficient, and transparent market and reduce systematic risks when passed into law.

Speaking during the debate, Ibrahim said “the Bill prohibits Ponzi/Pyramid Schemes as well as other illegal investment schemes and prescribes a jail term of not less than 10 years for promoters of such schemes. The Commission would also be empowered to shut down such prohibited investment schemes.

“We are enhancing provisions relating to efficient regulation of investment scheme. Recently they is a lot of complaints by Nigerians to the extent of the FG itself but some embargo on us accounts on Ponzi schemes. So as of the time of signing the current act, the Ponzi scheme was not in existence in Nigeria. So we have to put some regulations to monitor them.

“The current ACT regulating the capital market in the securities and investments act of 2007. It was signed by the late Umaru Musa when he was the President. If you calculate from 2007 to date it’s about 15 years. The current reality in the capital market requires that those regulations be improved to enable the regulators(SEC) to perform their optimum functions.

“That is why we are revealing the ACT because that some essential part of the ACT requires amendments and also there is a need to introduce some new sessions of the ACT. The original ACT contains about 266 sessions but the current one contains about 351 sessions.”