SEC pledges zero tolerance for fraudulent market activities

The Securities and Exchange Commission has reaffirmed its commitment to ensuring that only fit and proper individuals operate in Nigeria’s capital market, vowing to clamp down on fraudulent activities and protect investors.

In a statement made available to our SEC director correspondent on Sunday, the director general of SEC, Emomotimi Agama, declared that market operators engaging in unethical practices would not be allowed to go unpunished.

He emphasised that the Commission’s primary mandate remains investor protection, stressing that 2025 will usher in a period of zero tolerance for non-compliance.

“It is important to state clearly that every investor in Nigeria is under the cover of the SEC as long as the person operates within the Nigerian capital market. And so the year 2025 is a year where we say that there is zero tolerance for any activity that does not fall within the laws of the Investments and Securities Act 2007.”

The SEC boss highlighted that proper disclosure by public companies would be a key focus, as transparency is essential for investor confidence.

According to him, companies that fail to provide adequate information to investors will face penalties, as withholding crucial details violates SEC regulations.

“Disclosures by public companies will be very essential in ensuring that investors have access to adequate information for making informed decisions,” he stated. “If information is not provided as required, it will be considered a violation of the SEC’s rules and the ISA.

We want to make it clear that there is no hiding place anymore for individuals or entities seeking to defraud investors in the Nigerian capital market.”

Agama further disclosed that the recently passed Investment and Securities Act by the National Assembly will strengthen the SEC’s regulatory framework. He expressed optimism that once the Act is signed into law by President Bola Ahmed Tinubu, it will provide greater powers to tackle fraudulent activities and enhance market integrity.

“We are excited that the National Assembly has passed the new Investment and Securities Act, and we are earnestly waiting for the President’s assent. The bill is currently undergoing administrative processes before reaching the president for approval,” he said.

He noted that one of the provisions of the new Act is stricter penalties for fraudulent schemes, including Ponzi schemes that have exploited unsuspecting investors. The SEC chief warned that perpetrators of such schemes will face severe consequences under the new law.

“Ponzi schemes will no longer be an avenue for fraudsters to deceive investors,” he assured. “The penalties in the new ISA are stiff enough to deter such activities, and we are committed to implementing them fully.”

According to the statement, the SEC has already begun taking bold steps to clean up the market. Agama pointed out that the recent revocation of licences, suspension of market operators, and crackdowns on unregistered entities are just the beginning of a broader enforcement strategy.

“What you have seen so far—licence revocations, suspensions, and enforcement actions against unregistered operators—is only the tip of the iceberg,” he stated. “In 2025, we will intensify our efforts to protect investors. A protected investor is a powerful investor, and we will do everything within our regulatory powers to deter unscrupulous individuals from defrauding Nigerian investors.”

He urged both existing and prospective market operators to comply with SEC regulations, emphasising that compliance and transparency are fundamental to building a strong and sustainable capital market.

Agama assured investors that the SEC is committed to ensuring a well-regulated market, with full backing from the administration of President Bola Tinubu. He reiterated that every investor in the Nigerian capital market is under the protection of the SEC, provided they operate within legal boundaries.

The PUNCH reported that the Securities and Exchange Commission has announced plans to publicly shame capital market operators found guilty of violating market laws and regulations.