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To protect investors and combat the rising tide of financial scams, the Securities and Exchange Commission (SEC) Nigeria has announced the launch of a USSD code system, This will help Nigerians verify the registration status of capital market operators, even without internet access.
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The initiative, which will officially be launched at the upcoming Capital Market Committee (CMC) meeting this quarter, aims to empower mobile phone users across the country to instantly identify genuine investment service providers, especially in rural or low-connectivity areas.
“We are introducing a code system that allows mobile users to verify capital market operators using USSD codes. If anyone approaches you with an investment offer, you can now easily check their legitimacy by dialing the code — no internet required,” said Emomotimi Agama, SEC Director-General, during a briefing in Abuja.
Combatting Ponzi Schemes and Investment Fraud
Nigeria has witnessed a dangerous surge in Ponzi schemes and unregistered investment platforms. Many of them lure unsuspecting investors with promises of high returns far above the Central Bank of Nigeria’s Monetary Policy Rate (MPR).
Despite repeated regulatory warnings, schemes like the notorious InksNation (Pinkoin) — a fraudulent humanitarian crypto scam — have duped thousands. Most of these schemes lack SEC registration, have anonymous promoters, and operate outside the bounds of regulation.
According to experts, financial illiteracy, economic hardship, and weak enforcement have made many Nigerians vulnerable to these get-rich-quick schemes.
“The new USSD verification system is part of our national duty to safeguard investors, enhance financial literacy, and promote legitimate wealth creation opportunities through regulated channels,” he said.
Only SEC-Registered Firms Are Legitimate
Agama emphasized that registration with the Corporate Affairs Commission (CAC) alone does not grant an entity the right to operate as an investment company.
“The first question you should ask anyone discussing money matters is: Are you registered with the SEC? We have authorised stockbrokers, accountants, solicitors, and financial advisors who are recognised by law to provide investment services,” he stressed.
The Commission continues to promote regulated investment avenues. They include public offerings, collective investment schemes, and structured financial products as safer alternatives.
New Investment and Securities Act Introduces Tougher Sanctions
With the recent enactment of the Investment and Securities Act 2025, the SEC has been granted stronger enforcement powers. Under the new law, Ponzi schemes — now officially classified as “prohibited schemes” — carry severe penalties, including:
- Fines starting from ₦20 million up to ₦1 billion
- Prison terms of up to 10 years for offenders
- Prosecution of social media influencers and celebrities who promote illegal schemes
“This is the strongest legal stance Nigeria has ever taken against Ponzi promoters. We will no longer tolerate manipulation of public trust,” Agama said.
Investor Protection and Inclusion the Top Priority
The SEC reiterated its commitment to ensuring that Nigerians are equipped with the right tools and information to make informed investment decisions.
“Our goal is inclusive financial growth — to redistribute wealth through legitimate platforms and close the gap between regulated capital markets and everyday Nigerians,” the Agama concluded.
