SEC to Launch USSD Code to Fight Ponzi Schemes, Enhance Investor Protection in Nigeria
In a bold move to protect investors and crack down on fraudulent investment schemes, the Nigerian Securities and Exchange Commission (SEC) is introducing a USSD code system that will allow Nigerians to verify the legitimacy of capital market operators directly from their mobile phones, without internet access. The initiative is expected to be unveiled at the upcoming Capital Market Committee Meeting this quarter. Speaking ahead of the launch, SEC Director-General Emomotimi Agama described the new tool as a major step toward curbing the spread of Ponzi schemes and unregistered investment promoters across Nigeria. “If anyone comes to you claiming what they are not, all you need to do is check with the code to know the status of their registration. That will be launched at the next Capital Market Committee Meeting,” Agama announced.
The USSD code is designed to provide quick access to SEC’s operator verification service, especially for the large segment of Nigeria’s population using basic mobile devices. This makes it easier for people in rural and urban communities alike to validate the registration status of investment firms, thereby helping investors avoid scams that have plagued the financial ecosystem for years.
Agama emphasised that many unsuspecting Nigerians fall victim to fraudulent schemes simply because they cannot distinguish between SEC-licensed firms and unregistered operators. “It is important to ask the right questions. The first thing you ask anyone who comes to speak to you on money matters is their registration status with the SEC,” he advised.
He stressed that registration with the Corporate Affairs Commission (CAC) is not a license to operate as an investment firm. Only entities registered with the SEC are authorised to provide investment advice or operate in the capital market. “Only SEC-registered stockbrokers, accountants, solicitors, and other designated professionals are qualified to guide investors,” he added.
Education and Collaboration for Investor Protection As part of a broader campaign to deepen financial literacy and protect investors, the SEC is partnering with the Nigerian Educational Research and Development Council to embed capital market education into school curricula. The Commission is also collaborating with consultants to launch financial education games and partnering with other government agencies to create public awareness on the dangers of illegal investment schemes.
Agama reiterated that the SEC’s role is to promote wealth creation through structured, well-regulated platforms such as Collective Investment Schemes and public offerings. “We want Nigerians to know that you can make money legally, sustainably, and safely, without risking everything in get-rich-quick traps,” he said.
New Law Targets Ponzi Promoters with Heavy Sanctions With the recent enactment of the Investment and Securities Act (ISA) 2025, the SEC has been empowered to take stronger action against Ponzi schemes and similar financial crimes. The new law classifies Ponzi operations as prohibited schemes and imposes tougher penalties: a minimum fine of ₦20 million, which can rise to ₦1 billion, and a prison sentence of up to 10 years.
“There is no law in Nigeria that has taken such strict sanctions on Ponzi schemes and its promoters,” Agama stated, adding that the Act also gives SEC the authority to penalise celebrities and influencers who promote such schemes to the public.
He issued a stern warning to the public against investing in any product that guarantees exaggerated or unrealistic returns, especially those not registered with the SEC. “There is no legal protection for investors in unregistered schemes. Always verify through the SEC website or our official platforms before putting your money anywhere,” he cautioned.
