The Securities and Exchange Commission (SEC) has announced plans to introduce an innovative Unstructured Supplementary Service Data (USSD) code to help Nigerians verify the authenticity of capital market operators and curb the spread of Ponzi schemes and illegal investment activities.
The SEC Director-General, Emomotimi Agama, disclosed this in Abuja over the weekend, stating that the initiative would be officially launched at the next Capital Market Committee (CMC) meeting scheduled for this quarter.
According to Agama, the move is part of the Commission’s broader strategy to promote investor protection, strengthen financial literacy, and restore public confidence in the Nigerian capital market.
Agama explained that the code will allow mobile phone users to verify a capital market operator without internet access.
“If anyone comes to you claiming to be what they are not, all you need to do is check with the code to know their registration status,” Agama stated.
The SEC boss added that the initiative targets Nigerians across all socio-economic classes, particularly those in rural areas with limited internet access. By making verification easy and accessible, the Commission hopes to discourage unsuspecting investors from falling prey to fraudulent schemes.
Agama reiterated that registration with the Corporate Affairs Commission (CAC) alone does not authorize any entity to operate as an investment firm. Only those registered with the SEC are legally permitted to engage in investment activities.
To further deter illegal operators, Agama highlighted the Investment and Securities Act (ISA) 2025, which introduces stiffer penalties for Ponzi scheme promoters, now officially classified as “prohibited schemes.”
Under the new law:
Offenders will pay fines starting from ₦20 million and up to ₦1 billion depending on the scale of their operations.
Culprits risk 10 years imprisonment.
The SEC now has legal authority to take action against social media influencers and celebrities who promote fraudulent schemes.
As part of its proactive investor protection measures, the SEC is partnering with the Nigerian Educational Research and Development Council (NERDC) to integrate capital market education into the national curriculum.
Agama also revealed plans to introduce financial literacy games and other interactive tools to educate Nigerians about legitimate investment opportunities.
“The essence of regulation for us at the SEC is wealth redistribution. We want Nigerians to know they can grow wealth through legitimate means such as public offerings, collective investment schemes, and other structured financial products,” Agama explained.
The SEC once again urged Nigerians to stay vigilant and avoid investment schemes that promise guaranteed or unrealistic returns. Investors are advised to always verify the registration status of any investment company via the SEC’s website, its official communication channels, or the soon-to-be-launched USSD code.
Agama stressed:
“The SEC is leaving no stone unturned in ensuring that Nigerians have the right information to make wise investment decisions. Investor inclusion and protection remain our top priorities.”
With the rising number of fraudulent investment operators exploiting social media platforms to lure unsuspecting Nigerians, analysts believe this USSD initiative could significantly improve investor confidence and reduce the prevalence of Ponzi schemes across the country.