The Securities and Exchange Commission has said Nigerians have lost about N316bn to Ponzi schemes and illegal fund managers over the years, warning that greed and ignorance are sustaining the menace.
The Head of FinTech and Innovation Department at the Commission, AbdulRasheed Dan-Abu, disclosed this at a journalists’ academy, a training organised by the commission for finance journalists, in Abuja, while presenting a paper on combating investment fraud.
He described Ponzi schemes as fraudulent investment operations that pay returns to old investors from money collected from new entrants rather than from any genuine business activity.
“These schemes are not really doing anything. They are just collecting people’s money and using it to pay the initial investors. At some point, when there are no new investors, the whole thing crashes and the operators disappear,” he said.
According to him, the desire for instant wealth has made many Nigerians fall victim. “Everybody just wants to get rich today. That is actually what makes people fall into this trap,’ he noted.
“Even the people who are greedy now are more educated than those who experienced Charles Ponzi’s first scheme. Education has not stopped greed.”
