SEC alerts Nigerians on fraudulent online investment scheme

The Security and Exchange Commission, Nigeria (SEC) has alerted Nigerians and especially the investing public on the activities of a new online investment scheme tagged ‘MMM Federal Republic of Nigeria (nigeria.mmm.net).’

The warning was contained in a statement on the official website of the commission.

The statement reads in part, “The attention of the Securities and Exchange Commission, Nigeria (SEC) has been drawn to the activities of an online investment scheme tagged ‘MMM Federal Republic of Nigeria (nigeria.mmm.net).’

According to SEC, the platform has embarked on an aggressive online media campaign to lure the investing public to participate in what it called “mutual aid financial network” with a monthly investment return of 30%.

While advising the public to be wary of the activities and intentions of the group, the Commission, therefore, confirms that the operation of this investment scheme has no tangible business model hence it’s a PONZI SCHEME where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission.

The Commission further advised the general public to distance themselves from this online scheme noting that anyone that subscribe to this illegal activity is exposing him/herself to a great risk.

A Ponzi scheme is a special kind of fraud. It is based on a fake investment that one scheme (or group of schemers) gets other people to give money to.

In Ponzi schemes, the schemer basically says, “I found a great way to make money fast. The more you give me, the more I can invest in that cause, and the more I can earn for us all”. But a Ponzi scheme doesn’t actually “earn money”. Instead, all of the scheme’s money comes from the investors.

Once a Ponzi scheme gets too many investors, the system will always crash. This is because the investors all expect more money than they invested, and they will get impatient.