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CBEX: Ponzi scheme promoters face 10 years jail term, N20m fine
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The sudden crash of CBEX, a digital investment platform accused of running a Ponzi scheme that allegedly bolted away with over ₦1.3 trillion (about $850) of depositors’ funds, has thrown many Nigerians into a quandary.
CBEX had promised the gullible Nigerians to double their invested funds within a month, but failed to honour its obligations, sending shock waves running through the spine of thousands of Nigerians, who now face financial ruin after the collapse.
The development sparked widespread reactions, with users expressing frustration, criticism, and concern. Many were reported to have stormed the CBEX office in Oyo State to destroy its belongings.
When it started, CBEX claimed to be a global platform linked to a government-owned business in China. However, Beijing Equity Exchange, in a statement released in 2024, denied any affiliation with the Ponzi scheme. It also claimed to operate offices in Canada and has ties with China. These were never substantiated; rather, CBEX displayed certificates online, such as a US FinCEN registration, while no real branches existed outside Nigeria. Business Insider Africa estimates that about 250,000 to 300,000 Nigerians invested their money in CBEX.
This would have raised a red flag for discerning investors to withdraw their patronage, but that did not happen due to greed and get-rich-quick syndrome.
Following its collapse, the Economic and Financial Crimes Commission (EFCC) announced it would collaborate with Interpol to track down the masterminds, including those possibly hiding overseas.
In the aftermath of the sad development, Chief Economist at SPM Professionals, Paul Alaje, has advocated investment education, highlighting that Nigerians have lost an estimated ₦4.8 trillion to pyramid scams since the collapse of MMM in 2016. “Since MMM in 2016, Nigerians have lost approximately 4.8 trillion to pyramid scams. The pyramid scam is a scheme designed to rip you off of funds. It is only a pyramid scam that promises more interest than the IMF and World Bank put together in a month and sometimes in a week,” Alaje said.
Meanwhile, the Securities and Exchange Commission (SEC) clarified that neither CBEX nor its affiliates were granted registration by the Commission at any time to operate as a Digital Assets Exchange, solicit investments from the public, or perform any other function within the Nigerian capital market.
“Preliminary investigations carried out by the Commission have revealed that CBEX engaged in promotional activities to create a false perception of legitimacy, to entice unsuspecting members of the public into investing monies, with the promise of implausibly high guaranteed returns within a short timeframe.
“CBEX has failed to honour withdrawal requests from their subscribers and abruptly closed their physical offices, amid mounting complaints,” the SEC stated.
The SEC emphasised that under the provisions of Section 196 of the Investments and Securities Act 2025, the Commission would collaborate with relevant law enforcement agencies to take appropriate enforcement action against the CBEX, its affiliates, and promoters.
“The Commission uses this medium to remind the public to REFRAIN from investing in or dealing with any entity offering unrealistic returns or employing similar recruitment-based investment models.
“Prospective investors are advised to VERIFY the registration status of investment platforms via the Commission’s dedicated portal: www.sec.gov.ng/cmos before transacting with them”, the SEC added.
SEC Director General, Dr. Emomotimi Agama, had recently said the Commission is launching a more forceful and coordinated enforcement regime against unregistered and illegal “phony” investment schemes, otherwise known as Ponzi schemes. He said that with the newly enacted Investments and Securities Act, 2025 (ISA 2025), the Commission now has enhanced powers to prosecute Ponzi schemes and their promoters.
According to the SEC, investigations were ongoing on CBEX, adding that promoters of the failed scheme will not go scot-free. Agama said the new law has given the Commission more powers and blocked loopholes in emerging areas of virtual and digital assets.
“The ISA 2025 has given the Commission the legal backing to provide clarity, ensure investor protection, and enhance market confidence, especially in new and previously unregulated segments such as digital asset exchanges and online foreign exchange platforms,” Agama said. He said that while the apex capital market regulator would continue to support innovations in finance and investments, the Commission would maintain strict oversight in line with its enhanced investor protection mandate. “We welcome innovation, but it must occur within a regulated environment that protects investors and maintains the integrity of our market,” Agama said.
He recalled that the SEC had even with the limited scope of the repealed Act, maintained extensive surveillance and was able to shut down a number of Ponzi schemes, with some of the promoters, like Fahmzi Interbiz, jailed for defrauding Nigerians. The ISA 2025 gives the Commission more powers to deal with issues, stressing that the Commission will ensure that promoters of such schemes are not allowed to operate.
Indeed, the performance of the Nigerian capital market has been reinvigorated for sustainable growth in line with global best practices. The market has been modernised with a stronger regulatory framework for financial market infrastructures (FMIs), ensuring stability and reducing systemic risks, notwithstanding the global headwinds occasioned by the Donald Trump tariff war.
Indeed, the Nigerian capital market has been enhanced by the Investments and Securities Bill (ISB) 2025, recently assented to by President Ahmed Bola Tinubu. The landmark legislation, which repeals the Investments and Securities Act No. 29 of 2007, has been described as a major boost to capital market regulation in Nigeria. It strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.
The enactment of the ISA 2025 reaffirms the authority of the Securities and Exchange Commission (SEC) as the apex regulatory authority of the Nigerian Capital Market to regulate the market to ensure capital formation, the protection of investors, and the maintenance of a fair, efficient, and transparent market and reduction of systemic risks. It introduces transformative provisions to further align Nigeria’s market operations with international best practice.
Speaking on key highlights of the Act, Director General of the SEC, Dr. Emomoitimi Agama said, “The Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators. These enhanced powers and functions ensure full conformity with the requirements of the International Organization of Securities Commissions (IOSCO) Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC to retain its “Signatory A” status and enhancing the overall attractiveness of the Nigerian capital market.”
One notable aspect of the ISA 2025 is the recognition of digital assets as securities, providing a legal framework for Virtual Asset Service Providers (VASPs) and Digital Asset Exchanges. For the first time, virtual assets and investment contracts are formally classified as securities under Nigerian law. This brings VASPs, Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the SEC’s regulatory purview, providing a clear legal framework for digital assets.
The new Act provides for “Enforcement Against Illegal Investment Schemes”. It expressly prohibits Ponzi Schemes and other unlawful investment schemes, while prescribing stringent jail terms and other sanctions for the promoters of such schemes. To ensure that illegal fund managers are not allowed to fleece unsuspecting Nigerians of their hard-earned funds, the Act stipulates an express prohibition of Ponzi/Pyramid Schemes and other illegal investment schemes. The Act stipulates that promoters and operators of any entity engaged in a prohibited scheme commit an offence and are liable on conviction to a penalty of not less than N20,000,000 or imprisonment for a term of 10 years or both. This is a transformative step for the capital market, reflecting a commitment to building a dynamic, inclusive, and resilient capital market.
Similarly, salient provisions of the Act address existing restrictions in respect of funds raising from the capital market by Sub-Nationals and their agencies to allow for greater flexibility. State and local governments can now raise funds through the capital markets for public projects like infrastructure or healthcare.
This reduces their reliance on federal allocations or debt, fostering economic development at sub-national levels while increasing transparency in fund utilisation.
Furthermore, transparency in securities transactions has gained traction in the market as the Act introduces the mandatory use of Legal Entity Identifiers (LEIs) by participants in capital market transactions. This stipulation is designed to improve transparency in the conduct of securities transactions.
In the same vein, ISA 2025 introduces a stronger regulatory framework for financial market infrastructures (FMIs), such as clearing houses and central depositories, ensuring stability and reducing systemic risks in Nigeria’s capital markets. It creates a legal framework for commodity exchanges and warehouse receipts, allowing for more structured commodity trading and agricultural financing. This is particularly important for Nigeria’s agricultural and mining sectors, which were not well-integrated into the capital market under the ISA 2007. Under the new law, public companies must obtain SEC consent before engaging in mergers, acquisitions, or issuing securities.
The Act mandates that no public company shall undertake schemes, transactions, arrangements, or issue securities related to corporate actions and restructurings without prior approval from the SEC. The idea is to ensure that corporate restructuring activities comply with market regulations and enhance transparency.
Some other provisions of the Act include Comprehensive Insolvency Provisions for Financial Market Infrastructures, which introduce provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws.
Management of Systemic Risk – introduces provisions for the monitoring, management and mitigation of systemic risk in the Nigerian capital market. Expansion of the Category of Issuers to the Public – The Act expands the categories of issuers, as a key step towards the introduction of a wide range of innovative products and offerings as well as the facilitation of “commercial and investment business activities”, subject to the approval of the Commission and other controls stipulated in the Act. Classification of Exchanges and inclusion of provisions on Financial Market Infrastructures – The Act classifies Securities Exchanges into Composite and Non-composite Exchanges. A Composite Exchange is one in which all categories of securities and products can be listed and traded, while a Non-composite Exchange focuses on a singular type of security or product. There are also new provisions on Financial Market Infrastructures such as Central Counter Parties, Clearing Houses, and Trade Depositories.
Comprehensive Insolvency Provisions for Financial Market Infrastructures – The Act introduces provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws. Management of Systemic Risk – The Act introduces provisions for the monitoring, management and mitigation of systemic risk in the Nigerian capital market. Expansion of the Category of Issuers to the Public- The Act expands the categories of issuers, as a key step towards the introduction of a wide range of innovative products and offerings as well as the facilitation of “commercial and investment business activities”, subject to the approval of the Commission and other controls stipulated in the Act. Strengthening the Investments and Securities Tribunal – The Act amends some key provisions in the repealed ISA 2007 on the Composition of the Tribunal, constitution of the Tribunal, qualification and appointment of the Chief Registrar, as well as the jurisdiction of the Tribunal to enhance the ability of the Tribunal to discharge its mandate optimally.
The capital market expert said the enactment of ISA 2024 is a welcome development that promises to modernize Nigeria’s investment and securities laws, improve regulatory oversight, protect investors, and support emerging financial technologies.
According to Prof Uche Uwaleke, Director of the Institute of Capital Market Studies at the Nasarawa State University Keffi and President of the Capital Market Academics of Nigeria, “For achieving this feat, the National Assembly Committees on the Capital Market, the Securities and Exchange Commission, and indeed the entire Capital Market community in Nigeria deserve a pat on the back.
“It bears repeating that the ISA 2025 ensures a more transparent, efficient, and competitive capital market consistent with global standards set by the IOSCO. This should strengthen investor confidence, enhance market integrity, encourage foreign investment, and ensure that Nigeria retains its “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU).
News
Team Europe explores Kannywood’s potential to create jobs, skills, opportunity and social change across northern Nigeria
By Ojomah Austin.
Diplomats visited Kano Film Village to gain first-hand insight into how Kannywood is contributing to youth employment, education and economic opportunity across northern Nigeria. And to experience first-hand how a good entertainment can carry important social messages.
The delegation, led by the European Union Ambassador to Nigeria and ECOWAS, Gautier Mignot, included ambassadors and deputies from Denmark, Spain, Italy, France, Czechia, Finland, Belgium and Austria.
The delegation was received by the Executive Secretary of the Kano State Films and Video Censorship Board, Alhaji Abba El-Mustapha, and the Managing Director of the Nigerian Film Corporation, Ali Nuhu.
Team Europe met filmmakers, actors, producers and regulators. They observed the production of Hindatu, a film telling a story of a young girl determined to continue her education and become a medical doctor despite her family intention to marry her.
Speaking during the visit, Ambassador Mignot stressed the power of visual and creative arts to influence people’s behaviour:
“Stories have the power to inspire change. Films that promote education, opportunity and inclusion can spark important conversations and encourage positive change within communities,” he said.
“Creative industries are not only about culture. They are also about jobs, skills, entrepreneurship and creating opportunities for young people. Across Nigeria, young people are demonstrating remarkable talent and creativity, and industries such as Kannywood are helping transform that potential into livelihoods and economic opportunity”, he added.
Executive Secretary of the Kano State Films and Video Censorship Board, Mr Alhaji Abba El Mustapha noted that Kannywood plays an important role in promoting positive social values while creating opportunities for practitioners across the creative sector. He added that Films and Video Censorship Board, had approved more than 10,000 films over the years while supporting the industry through training programmes, workshops and stakeholder engagement.
“Our role is not only regulatory.
We also work with filmmakers to strengthen professional standards, support capacity development and ensure that films contribute positively to society,” he said.
The delegation also toured Kano Film Village, a production facility developed by broadcaster and filmmaker Abdullaziz Dansmall, a dedicated production environment where films could be produced efficiently.
“Our first major production was Gidang Haya. We used the revenue from that project to build little by little, expanding the facility over time. Our long-term ambition is to transform the site into a fully developed film village capable of supporting larger productions.”, Mr Dansmall said.
Managing Director of the Nigerian Film Corporation, Mr Ali Nuhu, highlighted the industry’s economic significance, citing research that identified film production as the second-largest source of youth employment in Kano State after agriculture.
The industry’s impact extends far beyond entertainment, creating livelihoods and supporting businesses throughout the value chain.
He also highlighted ongoing challenges facing the sector, particularly around distribution and access to production facilities, noting that the industry has increasingly adapted to digital platforms and online distribution channels as traditional DVD markets declined.
Team Europe visit also came as the European Union expands its support for cultural cooperation between Africa and Europe through initiatives such as the Africa-Europe Partnerships for Culture (AEPC), a €30 million programme supporting artist mobility, cultural spaces and collaboration between African and European creative professionals. The initiative reflects the EU’s growing recognition of culture and creative industries as drivers of economic opportunity, innovation and social development.
News
Defence Stakeholders Resist Plan to Reserve NDA Entry for Military School Alumni
By Gloria Ikibah
A proposal to grant automatic admission into the Nigerian Defence Academy (NDA) for graduates of military secondary schools has drawn strong opposition from defence stakeholders, who argue that the measure could compromise merit-based selection and conflict with constitutional provisions governing access to higher education.
This was the concerns raised on Tuesday during the second day of a public hearing organised by the House of Representatives Committee on Defence, as lawmakers considered a series of amendments to existing military legislation.
The proposed amendment to the NDA Act seeks to create a pathway for students graduating from military secondary schools to gain direct entry into the academy without undergoing the standard competitive admission process.
However, participants at the hearing cautioned that such a provision could unfairly disadvantage other qualified candidates seeking admission into the country’s premier military training institution.
The hearing considered four defence-related bills, among which includes a Bill for an Act to Amend the Nigerian Defence Academy Act, 2024 and for Related Matters (HB.1709), which proposes automatic admission for graduates of Nigerian military schools into the academy.
Presenting the position of the Nigerian Defence Academy, the Director of Military Training, Brigadier General Taiye Ahmed, explained that the proposed amendment seeks to alter Section 8(2) of the Second Schedule to the NDA Act by granting what he described as “automatic admission, right of first refusal” to applicants from Nigerian military schools.
He argued that admission into the NDA should remain open to all eligible Nigerians through a transparent and competitive process, regardless of educational background or institutional affiliation.
Ahmed said the proposed amendment provides that: “The board shall offer automatic admission for successful graduates from Nigerian military schools.”
According to him, the justification advanced by the proponents is “to prevent the graduates of the schools from being handy tools in the hands of non state violent actors because of the graduate military background.”
He further explained that the proposal also seeks to introduce an interpretation section defining “The Board” as the Board of the Nigerian Defence Academy, “Applicant” as candidates applying to the NDA, and “Nigerian Military Schools” as military schools that provide full military and academic training, including the Nigerian Military School, Zaria; Air Force Military School; Air Force Girls Military School; and the Nigerian Navy Military School.
However, Ahmed said the academy does not support the amendment in its current form.
“However it was observed that if the amendment is passed as phrased, it has the potential of creating statutory bottlenecks on the constitutional principle of federal character. The NDA operates on this principle to ensure national unity and equal representation across the 36 states of the federation and the Federal Capital Territory FCT,” he said.
He added that the proposal could also face legal hurdles because it would unfairly disadvantage other Nigerians seeking admission into the academy.
“Moreover, the proposed amendment could face legal challenges for being discriminatory against applicants who did not attend the military school as it could be perceived as disenfranchising them for admission into the Nigerian Defence Academy”, he added.
Ahmed maintained that graduates of military secondary schools already enjoy equal opportunities under the existing admission process.
“The graduates of military schools currently have equal opportunity to seek admission into the Nigerian Defence Academy to be commissioned as regular combatant officers by competing with other interested Nigerians.
“The process has consistently ensured that the NDA selects the best candidates irrespective of the secondary school they attended.
“Moreover graduates of the military schools have the opportunity for immediate enlistment as soldiers, especially the Nigerian Military School, Zaria upon graduation from military secondary schools and thereafter proceed to higher military institutions through military sponsorship. Upon graduation from higher institutions these graduates could apply to be commissioned as officers through the short service commission or the direct short service commission when advertised by any of the three services of the Armed Forces of Nigeria”, he said.
According to him, officers who do not secure commissions through those channels still have another opportunity later in their careers.
“Furthermore those unable to secure admission through the short service commission or the direct short service commission could apply for the executive commission later in their career.
“It is pertinent to state that the NDA has a very strict admission criteria including minimum JAMB score as well as very high standard physical, psychological and medical standard”, he asserted.
He further disclosed that available records indicate that civilian applicants sometimes outperform graduates of military secondary schools during the selection process.
He urged lawmakers to retain the current admission framework.
“Available record in the Armed Forces show that civilian candidates could be better than some military school graduates based on their earlier mentioned criteria to avoid disenfranchising excellent candidates that did not have the opportunity of attending military schools from admission into NDA.
“The NDA is of the opinion that the current admission process into the NDA should be maintained”, he stated.
Stakeholders also expressed concern that automatic admission for a particular category of applicants could limit opportunities for talented candidates from civilian schools and potentially weaken the diversity of the officer corps in the long term.
Besides the proposed amendment to the Nigerian Defence Academy Act, the committee also considered bills seeking to establish a Joint Doctrine and Warfare Centre to enhance coordination and effectiveness of military operations; establish the Armed Forces Medical College, Abuja; and establish the National Defence College of Nigeria as a postgraduate degree-awarding institution and centre for strategic research and professional military education.
Speaking at the close of the session, Chairman of the House Committee on Defence, Hon. Babajimi Benson, commended participants for their contributions.
“This is the peoples Parliament. The contributions have been worthwhile,” Benson said.
The debate formed part of broader deliberations on defence-related legislative reforms currently before the National Assembly, with lawmakers examining proposals aimed at strengthening military institutions and improving the effectiveness of Nigeria’s security architecture.
The House Committee on Defence, chaired by Hon. Babajimi Benson, is expected to review submissions from stakeholders before making recommendations on the contentious amendment and other defence bills under consideration.
News
ECOWAS Parliament Charts New Course to Electrify West Africa
…outline ambitious policies to tackle chronic electricity shortages despite vast energy reserves
By Gloria Ikibah
ECOWAS has unveiled a broad strategy aimed at closing West Africa’s persistent electricity deficit, despite the region possessing some of the world’s most significant untapped energy resources.
The plan was highlighted during a presentation at the ongoing delocalised joint meeting of the ECOWAS Parliament’s Committees on Energy and Mines; Infrastructure; and Agriculture, Environment and Natural Resources in Dakar, where policymakers and experts are examining pathways to accelerate energy access and rural development across the sub-region.
Delivering a presentation on “ECOWAS Regional Energy Policies and Key Energy Statistics,” the Acting Head of Conventional Energy at the ECOWAS Directorate of Energy and Mines, Mr Koumoin Arbaduis, painted a stark picture of a region blessed with abundant energy resources but still struggling to provide reliable electricity to millions of its citizens.
According to Arbaduis, West Africa possesses extensive reserves of crude oil, natural gas, biomass, uranium and coal, as well as an estimated 25,000 megawatts of hydroelectric potential. However, these advantages have yet to translate into adequate energy access and dependable power supply across the region.
He identified limited electricity generation capacity, poor access rates, costly transmission networks, significant technical and commercial losses, and heavy reliance on petroleum products as some of the key obstacles hindering progress.
Arbaduis explained that ECOWAS has developed a succession of regional policies and frameworks over the decades to address these challenges and build a more integrated and sustainable energy market.
He noted that the first ECOWAS Energy Policy, adopted in 1982 in the aftermath of the global oil crises of the 1970s, established the foundation for regional cooperation in energy production, petroleum exploration and electricity grid integration.
He said that the 2003 ECOWAS Energy Protocol subsequently provided a legal framework for investment, trade and long-term collaboration in the sector while laying the groundwork for the West African Power Pool initiative.
He also highlighted the significance of the 2006 ECOWAS/UEMOA White Paper on Access to Energy Services for Rural and Peri-urban Populations, which was designed to expand electricity access and modern energy services to underserved communities.
According to Arbaduis, major policy reforms introduced in 2013, including the ECOWAS Renewable Energy Policy and the Energy Efficiency Policy, were aimed at increasing the contribution of renewable energy to the region’s power mix, reducing energy losses and improving access to cleaner cooking technologies.
The ECOWAS official further pointed to the adoption of the ECOWAS Bioenergy Policy and the Policy for Gender Mainstreaming in Energy Access in 2017, noting that sustainable energy development must be inclusive and ensure equal opportunities for both women and men.
On emerging technologies, Arbaduis said the regional bloc had begun positioning itself for the future through the ECOWAS Green Hydrogen Policy Framework and Strategy, adopted in 2023. The initiative seeks to make West Africa one of the world’s most competitive producers and exporters of green hydrogen, with a production target of at least 500,000 tonnes by 2030.
He explained that the updated ECOWAS Energy Policy, adopted in July 2023, reflects changing economic conditions, technological advancements and climate realities. The revised framework prioritises improved governance, universal access to affordable and reliable electricity, energy diversification, efficiency improvements and wider access to clean cooking solutions.
Summarising the region’s long-term ambition, Arbaduis said the goal is to build “a community with access to modern, reliable and sustainable energy services for improved living standards and socio-economic development.”
At the end of the five-day parliamentary meeting, which started on June 15, with the theme, “Harnessing Renewable Energy for Rural Electrification and Empowerment of Rural Economies in the ECOWAS Region: The Role of the ECOWAS Parliament” , participants are expected to develop recommendations aimed at strengthening energy access, promoting investment and accelerating sustainable development throughout West Africa.
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