By Daniel Otera
A newly enacted legislation has significantly raised the stakes for operators of Ponzi schemes in Nigeria, as the Investments and Securities Tribunal (IST) confirms the imposition of a mandatory minimum fine of N10 million on individuals or entities found guilty of engaging in such fraudulent activities.
This development stems from the revised Investments and Securities Act (ISA), which replaces the 2007 Act, and introduces far-reaching reforms aimed at strengthening investor protection and restoring confidence in Nigeria’s capital market.
Addressing legal practitioners at a stakeholders’ engagement meeting in Abuja, Chairman of the IST, Amos Azi, described the new provision as a long-overdue deterrent that would tighten regulatory loopholes often exploited by fraudulent investment operators.
“The previous law was silent on specific penalties for Ponzi schemes. Now, with the new Act, we have a clear provision that prescribes a minimum fine of ten million naira. This is not just symbolic—it is a firm statement that illegal investment operations will no longer be treated lightly,” Azi stated.
The stakeholders’ meeting also served as a launchpad for a digital revolution within the Tribunal: the introduction of an electronic filing (e-filing) platform set to go live by July 2025. The system is designed to phase out the manual filing of cases and enable a faster, more transparent judicial process.
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“The purpose of this engagement is to ensure that members of the legal community are fully equipped with the knowledge required to navigate the new e-filing system. It is imperative that we all adapt quickly to these changes,” Azi explained.
The Tribunal’s move to digitise its operations comes amid broader regulatory reforms contained in the new ISA, which aligns Nigeria’s capital market infrastructure with international best practices.
Beyond the crackdown on Ponzi schemes, the new Act breaks new ground by formally recognising digital assets including cryptocurrencies as securities. It also provides legal backing for virtual service providers and virtual asset exchanges.
“These developments make room for the establishment of virtual exchanges, and they also expand the Tribunal’s mandate to adjudicate disputes that may arise in the virtual asset ecosystem, subject to passage through the existing complaint management structure,” Azi said.
This signals a critical shift in Nigeria’s financial regulation, as the country joins a growing number of jurisdictions acknowledging the legitimacy and economic potential of blockchain-based financial products.
The Abuja event, attended by legal professionals from across the country including Port Harcourt and Enugu, underscored the need for collaboration between the Tribunal and the Nigerian Bar Association (NBA). The Chairman of the NBA, Gwagwalada Branch, Owhor Clever, called for wider training to ensure all legal practitioners are brought up to speed on the new e-filing system.
“It is important that no lawyer is left behind. Broader training outreach will ensure seamless court proceedings under the new framework and allow us to serve our clients more effectively,” Clever urged.
The IST’s push for reform is not merely administrative it is strategic. As global investors increasingly demand efficient, tech-driven legal systems, Nigeria’s efforts to modernise its capital market dispute resolution mechanism are expected to yield long-term economic dividends.
“A modern, accessible and efficient dispute resolution mechanism is critical to the functioning of any capital market. This initiative will not only improve our service delivery but also encourage more intentional investments in the economy,” Azi concluded.
With the e-filing platform expected to launch by mid-2025, and a robust legal framework now in place to combat financial crimes and accommodate digital innovation, stakeholders say Nigeria is taking a decisive step towards becoming a safer and more competitive destination for capital inflows.
