The recent collapse of online investment platform PXES has left thousands of Nigerians counting their losses, with many reportedly visiting the company's offices in Yola, Adamawa State, and Kabba, Kogi State, to demand their money back. Videos showed aggrieved investors removing office equipment in Yola, similar to incidents reported in Kabba. This is not an isolated case, as Nigerians have been losing money to Ponzi schemes for decades, from "wonder banks" to MMM, MBA Forex, CBEX, and now PXES.
The Securities and Exchange Commission (SEC) has warned Nigerians about the risks of investing in unregistered schemes, citing unusually high returns, little or no risk, and dependence on new investors as clear warning signs. However, many Nigerians are under severe economic pressure and seek legitimate ways to protect their savings, pay school fees, and cope with inflation. When companies operate openly through offices, employees, websites, social media, and recognized bank accounts, citizens may reasonably assume they are being monitored by the authorities.
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, these warnings were not enough to prevent losses. The MBA case raises serious questions, with 125,397 investors depositing about ₦171.128 billion into MBA-related accounts before they were frozen in February 2021.
The Central Bank of Nigeria (CBN) and commercial banks have also been criticized for their role in the collapse of Ponzi schemes. Freezing 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 Nigerian Financial Intelligence Unit (NFIU) receives, analyzes, and shares financial intelligence on money laundering, terrorism financing, and related crimes.
The Economic and Financial Crimes Commission (EFCC) investigates financial crimes, but victims have expressed frustration with the slow pace of investigations and lack of convictions. The Independent Corrupt Practices and Other Related Offences Commission (ICPC) must act where corruption or abuse of office is involved. The Corporate Affairs Commission (CAC) provides corporate identity, but regulators must quickly detect CAC-registered companies operating without SEC approval.
To prevent future collapses, 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 offenses 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.
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, as the public is entitled to know what happened before the accounts were frozen. Authorities must determine who promoted PXES, how much was collected, where the money went, which banks and accounts were used, and when regulators became aware.
Key points
- The collapse of Ponzi schemes in Nigeria highlights regulatory failures and the need for greater accountability.
- Nigerians continue to lose millions to Ponzi schemes due to lack of effective regulation and enforcement.
- Authorities must take a coordinated approach to prevent future collapses and hold perpetrators accountable.
