Experts advocate for Inter-Agency Digital Task Force to Tackle Ponzi Risks in New ISA
Amid rising concerns over the adaptability of Nigeria’s regulatory framework to fast-evolving digital threats, top capital market scholars and legal experts have called for the creation of an inter-agency digital surveillance task force to address emerging gaps related to Ponzi schemes under the newly enacted Investment and Securities Act (ISA) 2025.
Speaking at a high-level webinar hosted by the Institute of Capital Market Studies (ICMS) at Nasarawa State University, Keffi (NSUK) in collaboration with the Capital Market Academics of Nigeria (CMAN), the experts acknowledged that while ISA 2025 represents a transformative step for Nigeria’s capital markets, significant blind spots remain in combating financial fraud driven by technology.
Why the Call for an Inter-Agency Task Force?
Prof. Uche Uwaleke, Director of ICMS, NSUK, emphasised that despite ISA 2025 introducing tougher sanctions, many fraudulent schemes — particularly those operating through social media platforms like WhatsApp, Instagram, and unregistered mobile applications — remain difficult to detect and neutralise in real-time.
Uwaleke proposed that the Securities and Exchange Commission (SEC) urgently constitute a task force including critical agencies such as the Economic and Financial Crimes Commission (EFCC), the Nigerian Communications Commission (NCC), and the National Information Technology Development Agency (NITDA).
In addition, he recommended the establishment of a public verification portal, where citizens can crosscheck investment platforms before committing funds — a move that, if implemented, could sharply curb the spread of fraudulent operations masquerading as legitimate investment schemes.
“Despite stronger penalties under ISA 2025 — including fines of not less than ₦20 million or 10 years’ imprisonment for Ponzi promoters — the absence of proactive detection mechanisms still leaves many investors vulnerable,” Uwaleke warned.
Notably, Section 192 of the ISA criminalises prohibited schemes, but as Uwaleke pointed out, its language tends to target physical operations, leaving a grey area around digitally operated scams.
A Broader Legal and Economic Context
Prof. Augustine Agom, a leading Professor of Law at Ahmadu Bello University, Zaria, noted that ISA 2025 has significantly bolstered investor protection provisions, enhancing SEC’s regulatory oversight powers.
However, Agom warned that “sharp practices” persist, urging both investors and regulators to maintain heightened vigilance as the market adjusts to the new legal environment.
Meanwhile, Prof. Adesina Bello, also of Ahmadu Bello University, stressed that the full compliance and enforcement of ISA 2025’s Registration, Regulations, and Financial Market Infrastructure sections would be crucial in delivering its promised benefits.
On the economic side, Prof. Aliyu Sanusi, an economist from the same institution, highlighted the Act’s forward-thinking provisions, including the recognition of non-interest financial instruments and project-specific bonds, which could deepen capital market participation and enhance fiscal discipline among subnationals.
Sanusi particularly praised the Act’s new issuance preconditions — such as revenue-to-debt service ratios — as critical safeguards against reckless public borrowing.
SEC’s Position and the Future of the Capital Market
In his remarks, the newly appointed Director-General of SEC, Dr. Emomotimi Agama, affirmed that ISA 2025 is a major leap toward creating a “dynamic, inclusive, and resilient capital market” that can catalyse broader economic development.
Yet, as discussions at the ICMS-CMAN webinar revealed, execution remains the linchpin. Without proactive surveillance, technological adaptability, and inter-agency collaboration, the bold ambitions of ISA 2025 could falter against the nimble threats of the digital age.
The Stakes for Nigeria’s Financial Future
BRANDECONOMY analysis suggests that Nigeria’s capital market regulators are racing against a rising tide of sophisticated, digitally-enabled financial frauds. The emphasis now must shift from reactive prosecution to preventive architecture — a model that sees Ponzi schemes and financial scams intercepted before they metastasize.
If the SEC successfully builds such a system — combining real-time monitoring, public education, inter-agency cooperation, and technology-driven verification — Nigeria could set a powerful precedent for other emerging markets grappling with similar challenges.
Failure to act decisively, however, risks undermining the trust that ISA 2025 aims to rebuild and could deter much-needed domestic and foreign investment from a capital market striving to become the continent’s beacon of innovation and resilience.
