There is need to sustain the battle against activities of illegal fund managers in order to protect investors and save the market, CHRIS UGWU writes
Following the rising rate of illegal fund managers in the economy, the Securities and Exchange Commission (SEC) and other stakeholders have continued to raise the alarm over the activities of the outfits, whose operations have defrauded unsuspecting Nigerians of their hard earned money.
The line of trade of these illegal fund managers, known as Ponzi in the developed market, is usually tinted with promises of high returns on investment.
Determined to protect investors and also ensure the promoters of the illegal schemes are made to face the full wrath of the law, a bill, which has passed second reading in the House of Representatives, recently recommends that Illegal promoters and operators of Ponzi/Pyramids Schemes in Nigeria are to get a 10 year jail terms.
What is ponzi scheme?
A ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organisers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk.
In many ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier- stage investors to create the false appearance that investors are profiting from a legitimate business.
Market…
