SEC to Launch USSD Code for Verifying Investment Firms, Cracks Down on Ponzi Schemes with New Law
csrreporters 
In a decisive effort to safeguard Nigerian investors and combat the rise of fraudulent investment schemes, the Securities and Exchange Commission (SEC) is set to introduce a USSD verification code that will allow the public to check the legitimacy of capital market operators directly from their mobile phones—without internet access.
The initiative is expected to be unveiled during the upcoming Capital Market Committee Meeting this quarter.
Empowering Investors With Mobile Access
Speaking ahead of the launch, SEC Director-General Emomotimi Agama described the tool as a game-changer in investor protection:
“If anyone approaches you with an investment offer, simply use the USSD code to verify their registration with the SEC. It’s that easy.”
The USSD system is designed to ensure accessibility for all Nigerians—especially those using basic mobile phones or living in areas with limited internet access. With this tool, users can instantly confirm whether an investment firm or individual is licensed, helping to prevent the spread of Ponzi schemes and unregistered operators.
Agama warned that many victims fall prey to scams because they can’t distinguish between SEC-registered entities and fraudulent promoters:
“Being registered with the CAC is not a license to operate in the capital market. Only SEC-licensed professionals—stockbrokers, solicitors, accountants, and fund managers—are qualified to offer investment advice or services.”
New Law Introduces Harsh Penalties for Fraud
The recently signed Investment and Securities Act (ISA) 2025 gives the SEC new powers to crack down on illegal financial schemes. Under the law:
- Ponzi schemes are officially prohibited
- Promoters face a minimum ₦20 million fine, up to ₦1 billion
- Offenders may receive prison sentences of up to 10 years
- Celebrities and influencers who endorse unlicensed schemes can also be penalized
“There’s never been a Nigerian law this strict on Ponzi schemes,” Agama emphasized.
Promoting Financial Literacy and Legal Wealth Creation
To deepen awareness and empower investors with the right knowledge, the SEC is working with the Nigerian Educational Research and Development Council to embed capital market education into school curricula. Additional plans include:
- Launching financial education games
- Partnering with government agencies to run nationwide awareness campaigns
Agama reinforced the Commission’s commitment to promoting wealth creation through regulated channels, such as Collective Investment Schemes and public offerings.
“You can build wealth the right way—legally, sustainably, and safely. Stay away from schemes promising unrealistic returns. Always verify before you invest,” he advised.
With this new tool and strengthened legal backing, the SEC aims to usher in a safer investment environment and restore confidence in Nigeria’s capital market.