Securities and Exchange Commission (SEC) on Thursday raised the alarm, when it uncovered another suspected illegal investment platform identified as TOFRO.COM (Tofro).
SEC warned Nigerians against falling for the group’s fraudulent antics through promises of usually high returns on investment.
SEC Director-General, Dr. Emomotimi Agama, also warned Nigerians to beware of firms that claimed their registration with Corporate Affairs Commission (CAC) and Special Control Unit against Money Laundering (SCUML) certification by the Economic and Financial Crimes Commission (EFCC) empowered them to operate investment schemes in the country.
Intimating the public about the new scheme, TOFRO.COM (Tofro), via a notice issued on Thursday, SEC warned that the suspected investment platform held itself out as a cryptocurrency trading platform, adding that such an investment scheme is not registered by the commission.
SEC stated that based on its investigation, Tofro’s operations exhibited the typical indicators of a fraudulent Ponzi scheme, including the promise of unusually high returns, heavy reliance on a referral system to sustain pay-outs, and failure to honourwithdrawal requests from subscribers.
SEC advised Nigerians to be wary of investment with Tofro, stating that anyone who places investment with the entity does so at their own risk.
The notice read, “The attention of the Securities and Exchange Commission has been drawn to the activities of an online platform known as TOFRO.COM (Tofro), which holds itself out as a cryptocurrency trading platform.
“The commission hereby informs the public that the Tofro is not registered by the commission either to solicit investments from the public or operate in any other capacity within the Nigerian capital market.
“Investigations have revealed that Tofro’s operations exhibit the typical indicators of a fraudulent Ponzi scheme, including the promise of unusually high returns, heavy reliance on a referral system to sustain pay-outs and failure to honour withdrawal requests from subscribers.”
SEC added, “Accordingly, the public is strongly advised to be wary about investing with Tofro, as any person who places such investment with the entity, does so at his/her own risk.
“The commission similarly reminds potential investors of the need to verify the registration status of investment platforms via the commission’s dedicated portal before transacting with them.”
Agama had said it was crucial for Nigerians to understand the dangers of putting their hard-earned money in ventures that were not registered or regulated by SEC.
He also warned during a sensitisation tour against Ponzi schemes at the Garki Market in Abuja, that CAC registration or EFCC certification did not confer legitimacy on any investment scheme.
The SEC director-general said it was disheartening that some Nigerians and foreign companies had specialised in defrauding citizens through Ponzi schemes, adding that the government will no longer sit by and watch billions of naira taken away from the people through such schemes.
Agama said it was crucial for Nigerians to understand the dangers of putting their hard-earned money into ventures not registered or regulated by SEC.
He stated, “It is disheartening that some Nigerians and foreign accompanies have specialised in duping Nigerians and government won’t sit and watch Nigerians being duped and this is what SEC is coming out to the people to educate them that if it is too good to be true, then watch out.
“We have seen many Ponzi schemes in the past, and the Investments and Securities Act had been signed into law by the President and the law recommends N20 million fine and 10 years’ imprisonment for offenders of Ponzi Schemes.
“So, that has empowered us to be in a better position to flush out all these fraudulent investment schemes that are damaging our economy
“We are using this sensitisation outreach to bring information to our people and that is why we are here and telling them that we are here to assist them to confirm legitimate investment schemes and we are letting them know we feel their pain.
“As we are doing this, we have helped to educate them against being duped. CAC registration and EFCC certificate is not enough to show that the company is registered with SEC and these are red flags.”
Agama said, “Training programmes being organised by these people to lure people into their schemes are also illegal. Verify before you invest in any scheme, and that is our message to Nigerians.”
Speaking with journalists, Assistant Director, Enforcement Department, SEC, Tope Onwionoko, said the management of the commission was passionate about financial literacy, especially with respect to Ponzi schemes that had become a scourge in the society of late.
Onwionoko said, “We want everybody to know about it, from the oldest to the youngest, from the rich to the poor. We want the message to go round the entire Nigeria.
“And as a start-off point, management decided that it’s a good thing to come to the market, because we know the place the people who trade in the market hold in the economy.
“So, we feel that we should bring this message to them, hoping that they will understand what to look out for, what the red flags are, and by the time we are done, the people that perpetuate Ponzi in Nigeria, they will carry their bags and leave, because it will no longer be business as usual.
“The people who fall victims are usually people who are not knowledgeable about how Ponzi schemes work. So, I think that for the most of them, it is lack of knowledge, essentially.”
Onwionoko added, “And, of course, we want to believe that economic hardship has a part to play. But more than anything, is lack of knowledge. Because even if you are hard up for cash in the economy, and there is an opportunity for you to lose the small that you have, you won’t go there.
“So, I think it’s because people don’t know what to look out for. They don’t know that somebody is attempting to collect what is in their hand. That’s why they fall victim.”
