New bill proposes 10-year prison sentence for Ponzi and pyramid scheme operators
The House of Representatives passed a bill at second reading, recommending a 10-year prison sentence for operators of Ponzi schemes and pyramid schemes such as MMM.
It will be remembered that in 2017, the Mavrodi Mundial Moneybox (MMM), the Russian-founded Ponzi scheme that was the rave of the moment at the time, destroyed the lives of so many Nigerians after it collapsed, forcing investors to lose huge sums of money. money.
Since then, there have been the emergence of several other Ponzi schemes which have left many Nigerians in tears after running away with their investments.
The new bill
However, this new bill would give the Securities and Exchange Commission more regulatory powers to combat such schemes, as well as easier access to securities and facilities for state and local governments.
The bill is titled “A Bill for an Act to repeal the Investments and Securities Act 2007 and to enact the Investments and Securities Bill to establish the Securities and Exchange Commission as the authority Supreme Regulator of the Nigerian Capital Market as well as Market Regulation to ensure capital formation, Market Protection to ensure capital formation, investor protection, maintain a fair, efficient and transparent market and reduce systematic risk ; and for related matters.’
The bill also establishes the Securities and Exchange Commission (SEC) as the primary regulator of the Nigerian capital market.
The bill will enable the SEC to properly regulate the capital market, ensure capital formation, protect the market to ensure capital formation, protect investors, maintain a fair, efficient and transparent market and to reduce systematic risks when adopted.
What they say
The sponsor of the bill, Babangida Ibrahim, Chairman of the House Committee on Capital Markets, observed that the current law governing the Nigerian capital market, the Investments and Securities Act No. 29 of 2007 , was signed into law by the late President Umar Musa Yar ‘adua in June 2007.
Speaking at the debate, Ibrahim said the bill would give a prison term of at least 10 years to promoters of Ponzi schemes.
“The bill prohibits Ponzi/Pyramid schemes as well as other illegal investment schemes and prescribes a prison term of at least 10 years for the promoters of such schemes. The Commission would also be empowered to close these prohibited investment schemes. We are strengthening provisions for effective regulation of investment regimes. Recently, there are a lot of complaints from Nigerians as the FG itself has imposed an embargo on Ponzi scheme accounts. Thus, at the time of the signing of the current law, the Ponzi scheme did not exist in Nigeria. So we need to put regulations in place to monitor them.
Ibrahim noted that current trends in capital market regulation, some 15 years on, have made it necessary to make major improvements in the law to bring the Nigerian market in line with international standards. He said “The current law regulating the capital market is the Securities and Investments Act 2007. It was signed by the late Umaru Musa when he was president. If you calculate from 2007 to date, that’s about 15 years. The current reality of the capital market demands that these regulations be improved to enable the regulators (SEC) to perform their functions optimally.