- SEC describes Loom Money Nigeria as an illegitimate business carried out by fraudsters on social media platforms.
- The Commission says it is working with security agencies to shut down the new Ponzi Scheme in Nigeria
- The agency also cautions Nigerians to desist from investing their money in Ponzi schemes that are proposing return levels that are unreasonably high.
Nigeria's regulatory agency, the Securities and Exchange Commission (SEC), says it is working with security agencies to shut new Ponzi Scheme – Loom Money Nigeria.
Mary Uduk, the SEC's acting DG, gave the warning during a press conference at the nation's capital this week.
Uduk, who was represented by acting Commissioner (Operations) at SEC, Isyaku Tilde, described the new Ponzi scheme as an illegitimate business carried out by fraudsters on social media platforms.
According to reports, the regulatory agency head said the venture had 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 to lure the investing public to participate by joining various Loom Whatsapp groups to invest as low N1000 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.”
Last week, Business Insider SSA by Pulse reported how young Nigerians are embracing the new money-making scam, Loom Money Nigeria.
The scheme, which is even worse than the collapsed MMM, lure young Nigerians to invest as low as N1000 and N13,000 and get as much as 8 times the value of the investment in 48 hours.
Operating with a central name - Loom Money Nigeria - with individuals creating their own WhatsApp groups with different names.