Tougher Laws Crack Down on Fraudulent Investment Schemes
The Nigerian government has taken a decisive step to combat financial fraud with the enactment of the Investments and Securities Act (ISA) 2025. This newly introduced legislation imposes severe penalties on individuals involved in unauthorized investment schemes, particularly Ponzi operations. Offenders now face a minimum fine of N20 million, a mandatory prison sentence of at least 10 years, or both.
In a statement released by the Securities and Exchange Commission (SEC), the regulatory body emphasized that the new law is designed to safeguard investors, fortify market integrity, and enhance transparency in the financial sector. According to SEC Director-General Emomotimi Agama, one of the biggest hurdles in prosecuting fraudulent investment promoters in the past was the lack of a robust legal framework. The ISA 2025 effectively closes that gap, equipping regulators with greater enforcement capabilities to clamp down on fraudulent schemes.
Beyond the hefty N20 million penalty, the new Act introduces further financial restitution measures, ensuring that convicted operators not only serve time but also repay illicit earnings. This legal concept, known as “disgorgement,” mandates that fraudsters return all illegally acquired funds to victims, serving as both a punishment and a deterrent for future violations.
One of the most significant changes under the new law is the broadening of SEC’s investigative powers. The Commission now has the authority to:
Access and review telephone records of suspected Ponzi scheme operators
Obtain critical digital evidence necessary for prosecution
Strengthen enforcement mechanisms to track and penalize fraudulent actors
Agama stressed that many Nigerians have fallen prey to Ponzi schemes due to weak regulatory measures in the past. However, with ISA 2025 in place, the SEC now possesses unprecedented authority to track down and hold scammers accountable.
“Protecting investors remains our top priority. This legislation grants us stronger tools to investigate and prosecute fraudsters who exploit unsuspecting individuals. With these new powers, we are leaving no room for financial criminals to operate,” Agama stated.
The ISA 2025 is more than just a punitive measure—it is a proactive step towards a more secure and transparent investment landscape. By deterring fraudulent schemes and enhancing investor confidence, the Act is expected to bolster long-term economic growth and foster a healthier capital market.