HOW many more Nigerians must lose their savings before the authorities admit something is fundamentally wrong with the way Nigeria regulates investment schemes? The latest case is the alleged collapse of PXES, an online investment platform that reportedly stopped paying investors in early September. Investors who put in tens of thousands to millions of naira are counting their losses. Some reportedly visited the company’s offices in Yola, Adamawa State, and Kabba, Kogi State, after they could no longer access their money. Videos reportedly showed aggrieved investors removing office equipment in Yola. Similar incidents were reported in Kabba.
This is not the first or second such case. It is part of a pattern that has lasted for decades. From the old ‘wonder banks’ to MMM, MBA Forex, CBEX and now PXES, the names and technology change, but the pattern remains. Nigerians invest their savings, schemes collapse, promoters disappear or face prolonged investigations, and victims struggle to recover their money. Investment fraud is too often blamed solely on the victims. Nigerians must exercise due diligence, as unusually high returns, little or no risk and dependence on new investors are clear warning signs identified by the SEC. However, personal responsibility does not excuse regulatory failure. Under severe economic pressure, Nigerians seek legitimate ways to protect their savings, pay school fees and cope with inflation. When a company operates openly through offices, employees, websites, social media and recognised bank accounts, citizens may reasonably assume it is being monitored by the authorities. This is precisely why accountability must extend beyond the victims to the institutions responsible for protecting the public: beginning with the Securities and Exchange Commission (SEC).
First, the SEC, Nigeria’s capital-market regulator, registers and monitors operators, investigates suspicious activities and enforces securities laws. Although it warned Nigerians about MMM, Loom Nigeria Money, Flip Cash Investment and MBA Forex, warnings were not enough; timely detection and enforcement were needed to prevent losses. The MBA case raises serious questions. Reports from the CBN’s court action showed that 125,397 investors deposited about ?171.128 billion into MBA-related accounts before they were frozen in February 2021. Which banks held the funds? Were suspicious transactions reported? And when did the banks, CBN, SEC and NFIU act? The fraud operators bear primary responsibility, but the CBN and commercial banks must also be scrutinised. Freezing the accounts does not prove collusion, but the failure to detect and stop suspicious transactions earlier raises concerns about monitoring, intelligence sharing and regulatory intervention.
The NFIU receives, analyses and shares financial intelligence on money laundering, terrorism financing and related crimes. Having warned about Ponzi schemes and unregulated investments, it must explain whether alerts were generated when billions flowed from thousands of investors: and where the money went.The EFCC investigates financial crimes. MBA investors reportedly protested at its Port Harcourt office in April 2021, demanding recovery and prosecution, while the agency later warned against fraudulent investment schemes. But where are the convictions, recovered assets and documented results? Investigation is not conviction, arrest is not justice, and freezing an account is not recovery. The ICPC must act where corruption or abuse of office is involved. The CAC provides corporate identity, not authority to solicit investments; regulators must quickly detect CAC-registered companies operating without SEC approval. Banks and payment companies must also be investigated because Ponzi schemes rely on accounts, transfers and electronic channels. Investigators must identify who processed, received, moved and withdrew the money, trace the beneficiaries and assets, and disclose what was recovered.
The police must investigate offences within their mandate, while agencies coordinate their roles: SEC for investment regulation, CBN for banking supervision, NFIU for financial intelligence, EFCC for financial crimes, ICPC for corruption, police for criminal conduct, and CAC for corporate information. Criminals do not operate in departmental silos; government must not investigate in silos either. Victims should not simply be dismissed as greedy or foolish. Unrealistic returns should raise suspicion, but it is the promoter who designs the scheme, makes the promises, recruits investors, controls the accounts and moves the money. Fraudulent investment schemes and ‘wonder banks’ predate the internet. Technology has merely expanded their reach through smartphones, websites, social media and modern banking channels.
Government institutions must also face scrutiny. Agencies should disclose when they issued warnings, froze accounts, made referrals or recovered assets. Any negligence, corruption or collusion must be investigated and punished. The Federal Government should independently review major Ponzi schemes of the past two decades, examining their promoters, registrations, banks, suspicious-transaction reports, regulatory intelligence, prosecutions, convictions and recoveries. The CBN deserves particular scrutiny: since it eventually froze MBA’s accounts, the public is entitled to know what happened before then. Were warning signs reported and shared among the banks, CBN, SEC, NFIU and EFCC?The latest PXES case must not become another brief news story. Authorities must determine who promoted it, how much was collected, where the money went, which banks and accounts were used, whether suspicious transactions were reported, and when regulators became aware. Any institutional failure must be established; if the scheme evaded reasonable controls, the public should be told how. PXES is the latest reported example of a recurring problem seen with MMM, MBA and CBEX. The names, platforms and promises change, but the pattern remains. Nigeria cannot continue regulating Ponzi schemes only after citizens have lost their money. Promoters must be prosecuted, funds traced, assets recovered and institutions held accountable.
The question is no longer only why Nigerians fall for Ponzi schemes, but why these schemes keep succeeding despite the regulators, banks, intelligence agencies, law-enforcement bodies and laws meant to stop them. Unless that question is answered, another PXES will emerge.