New USSD code to alert investors of unregistered and illegal schemes

Monday, July 21, 2025 - Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) is set to launch a new identification device that will allow investors to determine whether any firm or individual is statutorily empowered to offer investment products and services.

The dedicated Unstructured Supplementary Service Data (USSD) code system does not require internet service. It works seamlessly with all mobile phones.

The USSD initiative is aimed at making verification processes more accessible, particularly for Nigerians in areas with limited internet access. 

Director-General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama yesterday said the move was part of a broader effort to tackle the rise in unregulated investment schemes, including Ponzi operations that have led to widespread financial losses across the country.

He explained that the new system will enable mobile phone users to check the registration status of any individual or entity claiming to be an investment operator using a simple USSD code.

“With this system, Nigerians don’t need internet access. Anyone with a mobile phone can instantly verify whether someone is a registered capital market operator. If someone approaches you with an investment offer, just dial the code to confirm their status,” Agama said.

He said the Commission is ramping up efforts to root out unregistered and illegal investment schemes, asserting that it bears a national responsibility to enlighten the public on how to build wealth through legitimate means within the regulatory framework of Nigeria’s capital market.

Agama said the code will be formally launched at the next Capital Market Committee (CMC) meeting this quarter, urging Nigerians to participate in properly structured investment opportunities such as public offerings and collective investment schemes, which are overseen by the SEC to ensure investor protection and fair returns.

He said: “Inclusiveness and wealth redistribution are key goals for us. This can be achieved when people are educated and empowered to invest in secure and regulated platforms.

 “We are working with the Nigerian Educational Research and Development Council to introduce capital market education at early stages in schools. Financial literacy through games and other interactive tools is also part of our long-term strategy”.

He cautioned that registration with the Corporate Affairs Commission (CAC) alone does not authorise an entity to carry out investment activities. Only those duly registered with the SEC are permitted to operate in the capital market.

 “If someone claims they are offering investment services, the first thing to ask is whether they are registered with the SEC.  We have authorised professionals—stockbrokers, investment advisers, accountants, solicitors—who are properly registered to offer such services,” Agama said.

He added that the newly signed Investments and Securities Act (ISA) 2025 gives the Commission unprecedented enforcement powers against operators of Ponzi and other prohibited schemes.

 He pointed out that the law imposes fines of up to N1 billion and prison terms of up to 10 years for promoters of such schemes. It also extends liability to influencers and celebrities who promote unregistered or fraudulent investments.

He said: “This is the strongest stance Nigeria has ever taken against Ponzi schemes,” he said. “Under ISA 2025, the SEC now has the authority to go after not just the scheme operators, but also those who promote them—whether through social media, advertising, or endorsements.”

He added that the Commission is also working with other government agencies and private institutions to increase awareness and enforcement efforts.

He reiterated warning to the public to avoid unregistered investment schemes that offer unrealistic returns noting that such schemes are not recognized by the Commission and carry no form of legal protection.

He encouraged the public to verify the legitimacy of any investment product or operator by visiting the SEC website or contacting the agency through official communication channels.

Agama pledged the SEC’s commitment to building a transparent and trustworthy capital market that supports economic growth and gives investors the confidence to participate in wealth-building opportunities without fear of exploitation.

“The SEC remains resolute in its mandate to protect investors, promote fair practices, and strengthen public trust in Nigeria’s capital market. With these new tools and laws, we are more prepared than ever to confront the threat of Ponzi schemes and ensure financial safety for Nigerians,” Agama said.