SEC warns Nigerians against fake online investment schemes

The Securities and Exchange Commission (SEC) has warned Nigerians against investing in unregistered online investment schemes.

The commission stated that many of these schemes promoted on social media platforms and websites operate like Ponzi schemes, and can be shut down without notice.

In a public notice posted on the commission’s X account on Thursday, the SEC said it had observed an increasing trend of fake investment promotions across digital platforms, including WhatsApp, Instagram, Telegram, Facebook and TikTok.

“The Securities and Exchange Commission’s attention has been drawn to the increasing promotion of unregistered online investment schemes on social media applications and websites,” the SEC said.

According to the commission, many schemes promise unrealistic or guaranteed profits to attract unsuspecting members of the public.

“Many of these investment schemes exhibit characteristics of Ponzi or illicit investment schemes, while some operators of these schemes also provide illegitimate investment services to the public,” he said.

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The SEC emphasized that some of the platforms currently operating online are not registered or permitted to function in the Nigerian capital market.

The regulator warned Nigerians against relying on investment advice from individuals or organizations that do not have permission from the commission.

“Only operators registered with the SEC are authorized to provide investment and advisory services in Nigeria,” the notice added.

The commission advised the public to exercise caution before investing and urged them to verify the registration status of any investment platform or company before committing funds.

They further warn that schemes that promise very high or guaranteed returns often expose investors to fraud and large financial losses.