The Securities and Exchange Commission (SEC) of Nigeria has warned Nigerians against fraudsters running ponzi scheme, “Loom Money Nigeria.”
The acting Director-General of the commission, Ms Mary Uduk during a news conference on Thursday in Abuja gave this stern warning.
According to a statement by SEC’s Head of Media, Mrs Efe Ebelo, said that Uduk, who was represented by acting Executive Commissioner, Operations of SEC, Mr Isyaku Tilde, said Loom Money Nigeria had taken over the social media. She emphatised that the scheme targeted young people, luring them to participate in a pyramid model of the Ponzi.
Ms Mary Uduk disclosed that the fraudsters are carryig out their illegitimate activities via social media platforms like Facebook and WhatsApp, making it difficult for them to be caught. She also said the commission is very well aware of the scheme asking young Nigerians to invest as low as N1000 and N13,000 and to get as much as eight times the value of the investment in 48 hours.
She clarifies that the scheme is indeed a Ponzi scheme, where returns would be paid from other people invested funds with no tangible business model.
“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’.
“The platform has embarked on an aggressive online media campaign on Facebook and WhatsApp.
“They lure the investing public to participate by joining various Loom whatsapp groups to invest as low as N1,000 and N13,000 and get as much as eight times the value of the investment in 48 hours.
“Unlike MMM that had a website and the promoter known, the people promoting Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and Whatsapp.
“If it were a local Ponzi scheme with known offices, it would be very easy for the Commission to seal their offices and freeze their accounts.
“We therefore wish to notify the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi scheme, where returns are paid from other people’s invested sum.
“Also, its operation is not registered by the Commission,” she said.