By Matthew Eloyi
The House of Representatives has passed a bill for the second reading, proposing a 10-year jail term for operators of Ponzi and pyramid schemes.
The bill is titled, ‘A Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as well as Regulation of the Market to Ensure Capital Formation, the Protection of the Market to Ensure Capital Formation, the Protection of Investors, Maintain Fair, Efficient and Transparent Market and Reduction of Systematic Risk; and for Related Matters.’
The bill also establishes the Securities and Exchange Commission (SEC) as the primary regulator of the Nigerian capital market.
When passed into law, the bill will enable SEC to properly regulate the capital market, protect the market to ensure capital formation, protect investors, maintain a fair, efficient and transparent market and reduce systematic risks.
The sponsor of the bill, Babangida Ibrahim, Chairman of the House Committee on Capital Markets, observed that the present law governing the Nigerian capital market, the Investments and Securities Act, Act No. 29 of 2007, was signed into law by late President Umar Musa Yar’adua in June 2007.
Speaking during the debate, Ibrahim stated that the bill would give a jail term of not less than 10 years for promoters of Ponzi schemes.
In his words, “The Bill prohibits Ponzi/Pyramid Schemes as well as other illegal investment schemes and prescribes a jail term of not less than 10 years for promoters of such schemes. The Commission would also be empowered to shut down such prohibited investment schemes. We are enhancing provisions relating to efficient regulation of investment schemes. Recently there are a lot of complaints by Nigerians to the extent the Federal Government itself put some embargo on accounts on Ponzi schemes. So as of the time of signing the current act, the Ponzi scheme was not in existence in Nigeria. So we have to put some regulations to monitor them.”