Nigeria House of Representatives on Thursday proposed a 10-year jail term for operators of Ponzi and Pyramid schemes in the country.
The proposed legislation seeks to repeal and re-enact the Nigerian Capital Market, Investments and Securities Act.
The bill, which seeks the repeal of the Investment and Securities Act, 2007 was sponsored by a lawmaker from Katsina State, Babangida Ibrahim.
When signed into law, the bill which scaled the second reading on the floor of the House, will make the Securities and Exchange Commission (SEC) the apex regulatory body for the Nigerian capital market.
The enactment will enable SEC regulate the capital market, ensure capital formation, protect the market to ensure capital formation, protect investors, maintain fair, efficient, and transparent market and reduce systematic risks.
Leading the debate on the bill Ibrahim, who is chairman, house committee on capital markets said: “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 scheme. Recently there were complaints by Nigerians which forced the Federal Government to place an embargo 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.”
SEC had in March last year, disclosed that three million Nigerians had lost about N18 billion to Ponzi scheme operators.