Nigerian SEC clamps down on Yuan Dong Ponzi scam

Christopher Hayes

The Nigerian Securities and Exchange Commission said it has clamped down a Yuan Dong, a Ponzi scheme operator in Nigeria,

In an email statement, the SEC said its has attention was “drawn to the activities of an Illegal Operator carrying on business under the name of Yuan Dong (YDEC)”.

See below the statement of the Commission:

The SEC said owners of Yuan Dong paraded itself as an Investment Company thereby extending invitations to unsuspecting members of the public to subscribe in a scheme identified as a Resources Investment Account. Investments in the scheme ranges from a minimum deposit of ₦10, 000 to a maximum deposit of ₦240,000.

The investment period of the scheme is pegged at a minimum of 30 working days to a maximum period of 10 months with offer of interest rates on short and medium term basis, which include promise of a daily profit of ₦80.00 and ₦2,400 depending on the category of investment. Similarly, the company also entices its customers with payment of bonuses should they convince more investors to invest in the scheme.

The Commission has since conducted an investigation into the activities of this company and has established that its activities constitute a breach of the Investment and Securities Act (ISA), 2007. Furthermore, it was discovered that contrary to their supposed existence in over 20 locations across the country, the company only has functional offices in Asaba, Kano and Abuja. The Promoters of these illegal operations have been arrested by the Nigeria Police Force and are undergoing interrogation.

The Commission wishes to notify the investing public that the company is not licensed to carry out investments business of any sought; and as such its operations are illegal.

Consequently, pursuant to the Commission’s non tolerance policy of unhealthy practices in the market, the general public is hereby informed that in exercise of its powers enshrined in Section 13 (w) of the ISA 2007, the Commission “Sealed Up” the premises of the company on Thursday, February 23, 2017. This action became necessary to completely put an end to the unlawful activities of the company against unsuspecting investors.

While the Commission wishes to use this medium to reiterate its commitment to sanitize the Nigerian capital market of all illegal operators, the investing public is however advised to exercise due diligence and caution in the course of making investment decisions. Valid Licenses of lawful operators can be obtained on the Commission’s website; members of the public are advised to confirm the licenses of firms they intend to carry investment activities with.

Nigeria’s digital space is now washed with ponzi scams many of whom are operated by individuals whose identities are not known to anyone. Many of these sites use domain name protection services and shell companies to hide their identities.

See below list of the latest Ponzi scams in Nigeria

[table id=10 /]

It will therefore be practically impossible for anyone to know who is running what. The SEC has also issued fraud alerts in the past to warn Nigerians to stay away from Ponzi scams and all other schemes that are marketed as digital currencies.

MMM Nigeria, the largest digital POnzi scam to have ever being operated in Nigeria collapsed late last year causing losses of more than NGN5 billion in deposits and RoI liabilities. More than 3 million Nigerians invested in MMM Nigeria as at December last year. MMM Nigeria has since restarted calling on investors to donate fresh funds into the system.

Owners/top promoters of MMM Nigeria have since gone into the background. One Chuddy Anayo Ugorji, the leader of the scheme in Nigeria has reportedly flee to the Philippines. Ernest Mbanefo, another top affiliate who ran hos version of the site has not spoken since MMM Nigeria crashed.

The SEC has it work caught out. While the Commission seems to be more effective in clamping down Ponzi scams that operates physical space, there seems to be no action taken on scams operated online by anonymous persons. According to PageOne.ng’s analysts estimate, at least over 20 Ponzi scams are created daily.

2 thoughts on “Nigerian SEC clamps down on Yuan Dong Ponzi scam

Leave a Reply

Your email address will not be published.