As victims of the last ponzi scheme, MMM, gradually come to terms with the shocks and losses associated with their investment, the Securities and Exchange Commission (SEC) on Thursday, alerted the public of the emergence of another online fraud packaged as investment scheme tagged ‘Loom Money Nigeria’.
According to the Acting Director General of SEC, Ms Mary Uduk, Loom Money Nigeria has virtually hijacked social media by targeting young people to participate in a pyramid scheme. She thus called on the public to run as far away as possible from the fraudulent scheme to avoid burning their fingers.
Uduk gave the warning at a press conference organised by the Minister of Finance in Abuja.
The acting SEC boss who was represented by Acting Executive Commissioner, Operations of the SEC, Mr. Isyaku Tilde, said the fraudsters, carry out their illegitimate business activities via social media platforms like Facebook and Whatsapp where they lure unsuspecting young Nigerians to invest as low as between N1000 and N13,000 and get as much as eight times the value of the investment in 48 hours.
Uduk said managers of the venture have no tangible business model, describing it as a Ponzi scheme, where returns would be paid from other people’s invested funds.
“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 N1000 and N13,000 and get as much as 8 times the value of the investment in 48 hours.
“Unlike MMM that had a website and known promoter, the people promoters of 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. ”
Uduk, therefore, advised the general public to distance themselves from the scheme, adding, “Please note that anyone that subscribes to this illegal activity does so at their own risk.”