Operators of pyramid investment schemes considered to be ponzi now risk stiff penalties, including payment of N10 million as fines.
The Chairman of the Investments and Securities Tribunal (IST), Amos Azi, said the absence of punitive measures under the repealed Investments and Securities Act 2007 Act was identified as the reason for the proliferation of ponzi schemes like the recent CBEX in which several Nigerians lost over 1.5 trillion when it went under.
Azi said the repealed law did not provide for any sanctions against Ponzi scheme operators, adding that the situation would be different with the newly enacted IST Act, which now prescribes punitive measures of no less than N10 million against culprits.
The Chairman disclosed this on Friday in Abuja during a stakeholders’ engagement meeting to unveil the Tribunal’s new e-filing platform.
He said provisions in the new Act were expected to serve as a deterrent to perpetrators, to help tackle the menace of illegal investment operators within the capital market in the country.
Apart from the sanctions, Azi highlighted other significant innovations introduced by the Act to include the recognition of digital assets as securities in transactions, legal acknowledgment of cryptocurrency, and provisions for virtual service providers.
He explained that these additions not only allow for the establishment of virtual exchanges, it also broadened the Tribunal’s jurisdiction to adjudicate disputes arising from these areas—after passing through the complaint management framework.
Speaking on the on-boarding of the IST to the e-filing platform, Azi described it as a positive development that would enhance the investment climate in Nigeria.
He stated that the initiative is poised to boost investor confidence and stimulate intentional capital investment in the country.
The Chairman, however, issued a note of caution, stating that once the e-filing system becomes fully operational, the physical filing of cases would no longer be allowed in the tribunal.
He said the stakeholders’ meeting was convened to ensure that legal practitioners were adequately trained on the new system.
The Chairman of the Nigerian Bar Association (NBA), Gwagwalada Branch, Owhor Clever, appealed to the Tribunal to extend training opportunities to NBA members to ensure seamless court proceedings under the new system.
The stakeholders’ engagement on e-filing and case management also featured online participation from Abuja, Port Harcourt, and Enugu.
The Investments and Securities Tribunal is expected to go live with the e-filing platform, barring any changes, in July 2025.
