Loom Money Nigeria is a fraudulent scheme, SEC warns

The Securities and Exchange Commission, SEC, has said the Loom Money Nigeria, currently running on the social media is a fraudulent scheme being runned by frausters.

The acting Director-General of the commission, Ms Mary Uduk gave the warning at a news conference on Thursday in Abuja.

According to a statement by SEC’s Head of Media, Mrs Efe Ebelo, Uduk, who was represented by acting Executive Commissioner, Operations of SEC, Mr Isyaku Tilde, said Loom Money Nigeria had taken over the social media, adding that the scheme targets young people in social media.

Continuing, Uduk said the fraudsters carried out their illegitimate activities via social media platforms like Facebook and WhatsApp, luring young Nigerians to invest as low as N1,000 and N13,000 and to get as much as eight times the value of the investment in 48 hours.

According to her, the venture was a Ponzi scheme, where returns would be paid from other people invested funds.

“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’.

Read also: Increasing food prices push inflation rate to 11.37% in April, NBS says

“The platform has embarked on an aggressive online media campaign on Facebook and WhatsApp.

“They lure the investing public to participate by joining various Loom WhatsApp groups to invest as low as N1,000 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,” she said.

Advising Nigerians to ignore the scheme, Uduk said whoever patronised it does so as his or her own risk.

According to the SEC boss, an inter-agency committee, Financial Services Regulation Coordinating Committee, was working on the issue, while the commission was also collaborating with security agencies to track them down.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now