<\/p>\n
By George Mgbeleke<\/p>\n
Alarmed at the increasing proliferation and sophistication of Ponzi scheme operators and the devastating consequences of their victims, the Senate on Wednesday urged the Federal Government to take drastic steps in protecting the citizenry by investigating the lapses that allowed various schemes by the predators to thrive unchecked.<\/p>\n
The Senate as well berated the lack of coordinated oversight, real-time monitoring, and strict enforcement by relevant government agencies which has “created an enabling environment for such schemes to flourish, eroding public trust in legitimate financial institutions and posing systemic risks to the economy”.<\/p>\n
Consequently, the upper chamber mandated the Joint Committees on Capital Market; Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes, and ICT & Cybercrime to conduct a comprehensive investigative hearing, including public hearing, on the operations of Ponzi schemes in Nigeria, and report back in four weeks.<\/p>\n
The resolution followed the debate during plenary yesterday on a motion titled “Investigative Hearing into the operations of Ponzi Schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange (CBEX) incident”.<\/p>\n
Sponsored by Sen. Abiru, Mukhail Adetokunbo (Lagos East) and Sen. Izunaso, Osita Bonaventure (Imo West), the motion insisted that it is the duty of government to protect the populace from exploitative, predatory, and fraudulent financial practices and schemes that threaten their livelihoods.<\/p>\n
Presenting the motion, Sen. Abiru said the Senate is “deeply concerned about the rapid proliferation and alarming rise of unregulated and fraudulent investment schemes-commonly known as Ponzi or pyramid schemes such as MMM Nigeria in 2016; MBA Forex in 2020, to mention a few-which have repeatedly defrauded millions of Nigerians, causing severe financial hardship and, in some cases, driving victims to depression, family breakdowns, and even suicide.<\/p>\n
“Notes in particular the recent case of Crypto Bullion Exchange (CBEX), a digital investment platform which lured millions of Nigerians with the promise of outrageous returns, before suddenly collapsing and resulting in investors losing over N1.3 trillion (about $847 million), making it one of the most devastating financial scams in the country’s history;<\/p>\n
“Also notes that the CBEX incident is not an isolated case, but part of an existing and growing pattern of unregulated and fraudulent schemes leveraging technology, and social media to deceive the public, often using tactics such as referral commissions, celebrity endorsements, and fake testimonials to build credibility and drive recruitment”<\/p>\n
Sponsors of the motion said it is shocking that despite the scale of operations and visibility of CBEX, it operated for an extended period without facing sanctions by either the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC).<\/p>\n
It recommends robust mechanisms for monitoring, prevention, and prosecution.<\/p>\n
The Senate recognized that the growing sophistication of such fraudulent platforms, combined with high youth unemployment, widespread poverty, low levels of financial literacy, and a lack of access to formal investment opportunities, makes the Nigerian population increasingly vulnerable to such schemes.<\/p>\n
“Conscious that Section 88 (1) (a) and (b) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) empowers the National Assembly to conduct investigations into “any matter or thing with respect to which it has power to make laws,” and “the conduct of affairs of any person, authority, ministry or government department charged, or intended to be charged, with the duty of or responsibility for executing or administering laws enacted by the National Assembly”;<\/p>\n
“Also conscious that these constitutional powers empower the Senate to investigate the failure of regulatory agencies to monitor and prevent the CBEX fraud, as well as to propose necessary legislative or administrative reforms to forestall future occurrences”.<\/p>\n","protected":false},"excerpt":{"rendered":"
By George Mgbeleke Alarmed at the increasing proliferation and sophistication of Ponzi scheme operators and the devastating consequences of their victims, the Senate on Wednesday urged the Federal Government to take drastic steps in protecting the citizenry by investigating the lapses that allowed various schemes by the predators to thrive unchecked. The Senate as […]<\/p>\n","protected":false},"author":2,"featured_media":1228,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[2456,828,3490,3493,3494,3495,3496,3491,1043,1181,3492],"class_list":["post-5377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-administrative","tag-celebrity","tag-endorsements","tag-executing","tag-forestall","tag-future","tag-occurrences","tag-proliferation","tag-reforms","tag-responsibility","tag-sophistication"],"_links":{"self":[{"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/posts\/5377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/comments?post=5377"}],"version-history":[{"count":1,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/posts\/5377\/revisions"}],"predecessor-version":[{"id":5378,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/posts\/5377\/revisions\/5378"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/media\/1228"}],"wp:attachment":[{"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/media?parent=5377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/categories?post=5377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyechoes.ng\/index.php\/wp-json\/wp\/v2\/tags?post=5377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}