Ponzi Scheme: Reps Purport aforementioned a 10-year Jail Term for Operators

A bill seeking to regulate Ponzi investments and pyramid schemes by proposing a 10-year jail term for operators in Nigeria has passed its second reading at the House of Representatives.

The aforementioned bill also proposes more regulatory powers for the Securities and Exchange Commission and ease state and local governments’ access to securities and facilities.

Chairperson of the House Committee on Capital Market, Babangida Ibrahim, who sponsored the bill, noted that the current law governing the Nigerian capital market, the Investments and Securities Act, Act No. 29 of 2007, was signed into law by the late President Umar Musa Yar’adua in June 2007.

As 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.’

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Ibrahim noted that current trends in capital markets regulation, over 14 years after, have made it necessary to make major improvements to the Act to align the Nigerian market with international standards.

The lawmaker said the bill would raise the number of sections in the ISA 2007 from 316 to 351.

Ibrahim explained the bill prohibits Ponzi/pyramid schemes and other illegal investment schemes and prescribes a jail term of not less than 10 years for their promoters.

Earthnews gathered that introduction of new provisions for regulating derivatives and commodities trading to deepen the Nigerian capital market and the economy.