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National Assembly Proposes 10 years Jail Terms For Ponzi Scheme Promoters

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The Investment and Securities Bill, which aims to regulate the Nigerian capital market and address issues such as Ponzi schemes, has been passed by the National Assembly and is awaiting presidential assent to become law.

The bill includes provisions for possible jail sentences of not less than 10 years for promoters of Ponzi schemes, which have caused significant financial losses and undermined investor confidence in Nigeria.

The Investment and Securities Service Bill 2023 finally scaled through the final hurdle of the National Assembly when the Senate passed it on March 29. The bill, which is expected to aid the functioning of the capital market and facilitate the ongoing economic diversification in the country, was passed by the House of Representatives in December. It is only awaiting presidential assent to below a law.

At the plenary, the Senate President, Ahmad Lawan, stated that the bill is expected to protect investors, adequately regulate the market, reduce systemic risks as well as provide for more stringent punishment for operators of Ponzi schemes.

Some experts welcome the introduction of the prohibition on Ponzi schemes as long overdue, while others express concerns about the effectiveness of such measures and the potential impact on the investment climate.

The bill also proposes asset forfeiture and fines of 10-20% of the amount collected from victims.

However, there are divergent opinions on the issue, with some arguing that Ponzi schemes have worked in other places and accusing the National Assembly of copying foreign laws without considering their suitability for the Nigerian context.

There are also doubts about whether the bill will be signed into law before the expiration of the President’s tenure.

According to Nigeria’s Securities and Exchange Commission, three million Nigerians lost N18bn when the popular Ponzi scheme, Mavrodi Mundial Movement aka MMM, crashed in 2016. As of 2022, Nigerians have lost over N300bn in Ponzi schemes in five years, according to a report generated by the Norrenberger Financial Investments scheme.

The promoters of a popular investment scheme, Ovaioza Farm Produce Storage Business Limited, are facing prosecution for luring members of the public to an unregistered collective investment scheme. The promoters, Imu Yunusa and Goodness Omeiza have been accused of defrauding their victims up to N2bn.

Reacting to the introduction of the prohibition of Ponzi schemes, Chief Executive Officer of Enterprise Stockbrokers, Mr Rotimi Fakayejo, said that the move was long overdue and a welcome idea.

He said, “I remember very well, this Ponzi scheme that got a lot of people in trouble, MMM. In the end, it is not just about people losing money. It is the disinterestedness in investing. First, they invested in the wrong window and ultimately, they will not invest again.

“Some foolishly and gullibly invested in it and some because of ignorance entered into it and others because of greed. Those who entered into it because of greed know what they were doing, they are just greedy. But the ones who get into it ignorantly, not knowing that such schemes are not authorized by the SEC are the ones who may never enter into any viable or regulated investment window again. Every economy needs investment, for money to be revolving through profitable channels.”

Fakayejo also argued that both those who get involved in Ponzi schemes and their promoters should be punished, albeit, the sanctions would be different.

He said, “The person who goes into it should get a small punishment and the person that starts the scheme should get a huge penalty. For anything, you are supposed to make findings.”

Regarding the proposed jail term of not less than 10 years, Fakayejo stated that the inclusion of asset forfeiture and also a fine of 10-20 percent of the amount of money collected from victims may not be a bad idea.

Expressing a divergent opinion on the Ponzi scheme prohibition, the National Chairman of the Progressives Shareholders Association of Nigeria, Boniface Okezie, stated that Ponzi schemes had been embraced in other places.

“The Ponzi scheme has worked elsewhere; people have embraced it but the Nigerian market has not embraced it and SEC said that it is not known to them and that it is a scam and so they cannot allow Nigerians to patronize it.”

Okezie also accused the National Assembly of copying foreign laws that may have little or no impact on the Nigerian scene and doubted that the President, Major General Muhammadu Buhari (retd) would sign the bill before the expiration of his tenure next month.

The PSAN boss said, “I do not think the outgoing president will assent to that bill before he leaves office on May 29 because previous bills sent to him, it took him time to assent, not to talk of now that he is going for retirement.”

Speaking on some highlights of the bill in a statement released after the Senate passed the bill, the Director-General of the Securities and Exchange Commission, Lamido Yuguda, said that a recommendation was made in the bill for the inclusion of the National Pension Commission on the SEC board for increased collaboration between the two agencies, particularly to encourage greater investment of pension funds and in capital market products/instruments.

This is a welcome development, according to stakeholders, given the visible role that pension funds play in the capital market already.

BIG STORY

JUST IN: Tinubu Arrives Lagos after France Working Vacation

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President Bola Tinubu has arrived in Lagos after ending his working vacation in France.

The President arrived at the presidential wing of the Murtala Muhammed International Airport, Ikeja, on Tuesday, where Lagos State Governor Babajide Sanwo-Olu and other dignitaries were on hand to receive him.

The President’s arrival was confirmed by the Special Assistant to the President on Social Media, Olusegun Dada, who posted on X, “Landing. Welcome home, Mr President!”

Tinubu had departed Abuja on August 30 for the working vacation, spending one week in London before travelling to Paris.

According to a statement issued on Tuesday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, Tinubu departed Paris for Lagos, where he is expected to hold strategic meetings with political leaders and associates.

“While in Lagos, President Tinubu will also hold strategic meetings with political leaders and associates over several days in preparation for the 2027 elections,” the statement read.

The Presidency said Tinubu chose to travel to Lagos first to honour the memory of the late Chief MKO Abiola, winner of the June 1993 presidential election and a prominent figure in Nigeria’s democratic struggle.

On October 1, Independence Day, the President is expected to attend the premiere of a movie honouring Abiola at the Wole Soyinka National Theatre, Iganmu, Lagos.

Tinubu’s working vacation also included a private dinner with French President Emmanuel Macron in Paris.

Details later…

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BIG STORY

US Hails Nigeria’s Response to Militia Attacks, Seeks Protection for Plateau Communities

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The United States has commended Nigeria’s response to recent attacks in the Middle Belt.

The US Department of State’s Bureau of African Affairs, in an X post on Tuesday, also urged the federal government to sustain efforts to protect communities in Barkin Ladi LGA of Plateau State.

“The United States commends Nigeria’s strong response to the latest attacks from Fulani militant groups,” the bureau said.

“We will continue to work with the Nigerian government to protect Christians in the Middle Belt.

“We urge Nigeria to continue the momentum and defend the Barkin Ladi communities in particular.”

Nigeria’s Middle Belt, particularly the north-central region comprising Benue, Kogi, Kwara, Niger, Plateau, among others, has witnessed varying levels of armed attacks, kidnapping, communal violence and farmer-herder conflicts in recent months.

The US comment comes amid renewed insecurity in parts of the country, particularly among communities in Barkin Ladi, where a series of attacks and reprisals have been reported in recent months.

On September 27, six people were killed and two others injured after gunmen attacked a mining site in Lajam Marit village, Ropp district, Barkin Ladi.

The victims were reportedly shot dead at the site, while the two injured persons were taken to the hospital for treatment.

Five days earlier, the Plateau government imposed a dusk-to-dawn curfew on Barkin Ladi, Bokkos and Mangu LGAs following a series of attacks, attempted attacks and reprisals. Residents were ordered to remain indoors between 6 pm and 6 am until further notice.

The curfew followed an incident in which a resident, Andy Samuel, a priest, was reportedly shot dead at Marit Junction, while another person sustained injuries.

Troops later came under attack after leaving the hospital, with the assailants suspected of carrying out retaliatory strikes following earlier violence in parts of Barkin Ladi.

On September 20, at least five Fulani men were reportedly killed after suspected Berom militias attacked their vehicle in Barkin Ladi.

The victims were travelling to a market in Jos South when their vehicle came under attack near a security checkpoint. The assailants reportedly opened fire, killing all five occupants.

On September 10, two people were killed after suspected armed militia attacked Fulani herders along the Jong-Nyeriwei road and in Dorowa Babuje community, also in Barkin Ladi.

One of the victims was identified as 19-year-old Ishaku Yakubu, while another man, identified as Andata, was reportedly shot dead around Marit Junction in Dorowa Babuje. Several cattle were also reportedly rustled during the attacks.

The attacks have heightened security concerns in Barkin Ladi and other parts of Plateau, with authorities deploying troops and imposing restrictions in some affected areas to prevent further violence and reprisals.

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Court Sentences Four to Death Over Kidnapping in Edo

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The Edo State Special Criminal Court has sentenced four persons to death for their involvement in the kidnapping of a woman in the popular Vegetable Market, off Airport Road in Benin City.

Justice Aigbona Momodu gave the judgment bordering on 11 counts of kidnapping, conspiracy, armed robbery, cultism and unlawful possession of firearms, Channels TV reports on Tuesday.

The court, established under the directive of Edo State Governor Monday Okpebholo, is mandated to handle kidnapping and cultism-related cases, according to the report.

The four sentenced persons – three males and one female — are Marvelous Isaac, 32; Wisdom Michael, 36; Rufus Michael, 30; and Gift Raphael, 27.

According to the court’s verdict, the exhibits recovered from the four sentenced persons — a pump-action rifle, two unexpended cartridges and two expended cartridges– were ordered to be handed over to the State Criminal Investigation Department of the Edo State Police Command.

According to The PUNCH, the woman (name undisclosed) was at the market with her children and husband when gunmen reportedly came to the scene and whisked her away.

In a video online, a woman who claimed to have witnessed the incident described it as kidnapping, stressing, “Today, for the first time, I witnessed someone being kidnapped.”

She continued, “Who said kidnapping is not in Benin? A kidnapping happened in my presence right at Airport Road by the Vegetable Market. Just because it has not happened to you does not mean it doesn’t exist.

“I saved the woman’s children today. This is me. It happened in front of me. We were both buying something in the same place, at the vegetable market. This is me; I have bruises. These are my legs.”

The incident was subsequently confirmed by the State Police Public Relations Officer, Eno Ikoedem.

See the full court verdict below
”Sentence: In count one, you, Marvellous Isaac, is hereby sentenced to seven years’ imprisonment. In count two, three, four, five, six, seven, eight, nine, you, Marvellous Isaac, is hereby sentenced to death by hanging or through the administration of a lethal injection. You shall be hanged by the neck till you are dead. May the Lord have mercy on you.

”In count ten, you, Marvellous Isaac, is hereby sentenced to ten years’ imprisonment. In count eleven, you, Marvellous Isaac, is hereby sentenced to life imprisonment.

“Second defendant, in count one, you, Wisdom Michael, is hereby sentenced to seven years’ imprisonment. In counts two, three, four, five, six, seven, eight, and nine, you, Wisdom Michael, is hereby sentenced to death by hanging or through the administration of a lethal injection. You shall be hanged by the neck until you are dead. May the Lord have mercy on you.

”Third defendant, in count one, you, Rufus Emete Michael, is hereby sentenced to seven years’ imprisonment. In count two, three, four, six, and seven, you, Rufus Emete Michael, is hereby sentenced to death by hanging or through the administration of a lethal injection. You shall be hanged by the neck until you are dead. May the Lord have mercy on you.

”Fourth defendant, in count one, you, Gift Raphael, is hereby sentenced to seven years’ imprisonment. In counts two, four, six, and eight, you, Gift Raphael, is hereby sentenced to death by hanging or through the administration of a lethal injection. You shall be hanged by the neck until you are dead. May the Lord have mercy on you.

”Now, Exhibit M, the JoJef pump action, and two unexpended cartridges, and the two expended cartridges, Exhibit E and E1, are hereby confiscated to the Federal Government of Nigeria. Both exhibits shall be handed over to the Edo State Armourer of the Nigerian Police, State CID, Edo State Headquarters, by the Deputy Director of the Criminal Division for destruction 30 days hence. This shall be the judgment of the courts.”

 

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