The recently enacted Investment and Securities Act (ISA 2025) has significantly bolstered the regulatory authority of Nigeria’s Securities and Exchange Commission (SEC), granting it new powers to crack down on fraudulent investment schemes and enhance investor protection. A key highlight of this legislation is its provision allowing the SEC access to subscriber records from telecom and electronic communication companies to facilitate investigations and enforcement actions.
Expanded Regulatory Authority
Section 3(4)(j) of ISA 2025 now enables the SEC to obtain phone, internet, and electronic communication records in cases of suspected violations of securities laws. This unprecedented access is aimed at improving regulatory oversight, preventing fraud, and ensuring investor confidence in Nigeria’s capital markets. With this legislative backing, the SEC can now investigate market misconduct with greater efficiency, eliminating loopholes that previously hindered enforcement.
Crackdown on Ponzi Schemes
In a recent televised interview, SEC Director-General Emomotimi Agama emphasized that the new law strengthens the Commission’s ability to combat fraudulent investment operations, particularly Ponzi schemes. Agama revealed that before the passage of ISA 2025, the SEC lacked the legal authority to prosecute operators of such schemes effectively. Now, individuals found guilty of running Ponzi schemes face a minimum jail term of 10 years and a fine of ₦40 million.
“This new law empowers us to bring Ponzi scheme promoters to justice,” Agama stated. “The days of fraudsters exploiting regulatory gaps to deceive Nigerians are over.”
Beyond Monetary Penalties
Addressing concerns about whether the ₦40 million fine is sufficient punishment for perpetrators who may have swindled billions, Agama clarified that the penalty is just one component of the sanctions. The ISA 2025 introduces a disgorgement mechanism, ensuring that all illicit profits gained through fraudulent schemes are recovered.
“It’s not just about the fine,” Agama explained. “We will ensure that every fraudulent gain is retrieved and returned to its rightful owners. This serves as a strong deterrent to future offenders.”
Strengthening Investor Confidence
With ISA 2025, the SEC is now well-equipped to enforce stricter regulations and safeguard Nigeria’s capital market. The legislation aligns the country’s investment framework with global best practices, reinforcing Nigeria’s compliance with standards set by the International Organization of Securities Commissions (IOSCO).
“The goal is to eliminate bad actors and create a safer investment environment,” Agama stated. “By ensuring transparency and accountability, we are paving the way for a stronger, more resilient capital market.”
A New Era of Market Oversight
The signing of ISA 2025 by President Bola Ahmed Tinubu marks a significant milestone in Nigeria’s capital market reforms. The new law repeals the former Investments and Securities Act No. 29 of 2007, giving the SEC the mandate to take decisive action against fraudulent financial activities.
Additionally, the Act provides SEC with the authority to request and obtain telecommunications and digital communication records to aid investigations. This power is instrumental in identifying and prosecuting financial fraudsters who previously operated under the radar.
“With this law, we now have the necessary tools to bring justice to defrauded investors and hold perpetrators accountable,” Agama affirmed. “This is a new era for Nigeria’s financial sector, one that prioritises transparency, investor protection, and market integrity.”
The enactment of ISA 2025 represents a turning point in Nigeria’s fight against financial fraud. By equipping the SEC with expanded enforcement capabilities, the law enhances regulatory oversight and ensures that Nigeria’s capital markets remain a safe and attractive investment destination. As implementation progresses, investors can look forward to a more secure and well-regulated financial landscape.
