To clamp down on unregistered investment schemes and tackle the spread of Ponzi operations, Nigeria’s Securities and Exchange Commission (SEC) has announced plans to launch a USSD code verification system to enable the public to identify licensed capital market operators.

The initiative, expected to be unveiled at the upcoming Capital Market Committee meeting this quarter, will allow mobile phone users, irrespective of internet access, to verify the registration status of financial operators.

Speaking in Abuja over the weekend, SEC Director General Emomotimi Agama said the innovation forms part of a wider effort to sanitise the financial sector and protect investors from fraudulent schemes masquerading as legitimate opportunities.

“We are introducing a USSD system that allows Nigerians to verify capital market operators using just their mobile phones,” said Agama. “You don’t need internet. If someone claims to be a market operator, you can check using the code.”

Ponzi schemes, which promise unrealistic returns and operate outside the purview of financial regulators, have surged in recent years, targeting vulnerable investors across Nigeria. Many victims are lured by social media promotions and fraudulent guarantees of high returns.

Agama noted that the Commission is collaborating with educational bodies to embed capital market education into school curricula and is also exploring gamified learning tools to increase financial literacy from an early age.

“Regulation is not just about compliance; it’s about wealth redistribution,” he said. “We are pushing to ensure Nigerians understand they can grow wealth through legitimate channels—like public offerings and regulated investment schemes.”

The SEC chief stressed that registration with the Corporate Affairs Commission alone does not qualify any entity to offer investment services, and urged the public to verify firms via the SEC’s official platforms.

“We have licensed stockbrokers, accountants and solicitors. Anyone seeking investment advice should insist on dealing with SEC-registered professionals.”

A new legislative instrument, the Investment and Securities Act (ISA) 2025, has given the regulator increased powers to prosecute promoters of illegal financial schemes, including social media influencers and celebrities who advertise them.

“Under the new law, penalties now range from ₦20 million up to ₦1 billion, and offenders risk up to 10 years in prison,” said Agama. “This marks a serious turning point in the fight against Ponzi schemes.”

President Bola Tinubu signed the ISA 2025 into law earlier this year in what SEC officials described as a demonstration of executive commitment to investor protection.

Agama reiterated the Commission’s warning to the public against engaging in any investment promising exaggerated or guaranteed returns, stating that such offers are hallmarks of fraud.

He encouraged Nigerians to perform due diligence and verify any investment offer with the SEC directly, assuring that the Commission remains committed to investor protection and restoring public confidence in the financial market.

“Our job is to ensure that investors have the tools and information they need to make safe and informed choices,” he said.