SEC to Launch USSD Code for Verifying Capital Market Operators to Combat Ponzi Schemes
The Securities and Exchange Commission (SEC) of Nigeria has announced plans to launch a USSD code system designed to help the public verify the authenticity of capital market operators. This initiative, expected to be unveiled at the upcoming Capital Market Committee Meeting, is part of the SEC’s strategy to curb the proliferation of unregistered operators and combat fraudulent investment schemes, including Ponzi schemes, which continue to exploit unsuspecting Nigerians.
According to Dr. Emomotimi Agama, Director General of the SEC, the USSD verification system will allow Nigerians to confirm whether a person or entity is a registered capital market operator using a simple mobile phone code—without needing internet access. This is seen as a critical step in broadening public access to reliable financial information and preventing fraudulent actors from deceiving investors, particularly in areas with limited internet connectivity.
Agama emphasized the importance of financial literacy in achieving wealth redistribution through legitimate investment channels. He said the SEC is actively working with various stakeholders, including the Nigerian Educational Research and Development Council, to integrate capital market education into the national curriculum and is developing interactive tools such as educational games to promote financial awareness from an early age.
Clarifying a common misconception, the SEC boss noted that registration with the Corporate Affairs Commission does not authorize a company to operate as an investment firm. Only registration with the SEC qualifies a company to offer financial and investment services. He urged Nigerians to always verify the credentials of investment advisers and seek guidance only from SEC-certified professionals like stockbrokers, solicitors, and sponsored individuals.
Agama also referenced the recently signed Investment and Securities Act (ISA) 2025, which imposes severe penalties on promoters of Ponzi and prohibited schemes—including fines up to ₦1 billion and prison terms of up to 10 years. The SEC now has broader enforcement powers, including the ability to prosecute celebrities and influencers who promote illegal investment schemes. The Commission reiterated its commitment to investor protection and advised the public to perform due diligence before engaging with any investment products or platforms.
Source: Leadership