SEC Warns Against Investing In Unregistered Platforms

The Securities and Exchange Commission (SEC) has issued a warning to Nigerians, advising against investments in Risevest (Victoria Island) Cooperative Multipurpose Society Limited and Stecs (Alausa) Multipurpose Cooperative Society, popularly known as Stecs.

In a circular released over the weekend in Abuja, SEC clarified that neither Risevest nor Stecs is registered or authorised to operate within Nigeria’s capital market. The commission highlighted that both entities are promoting unapproved investment schemes, targeting unsuspecting members of the public.

In its statement, SEC revealed that Risevest is engaging in capital market activities by inviting the public to invest in its various schemes, while Stecs is promoting its ‘Stecs Commodity Mudarabah Investment Series I’ under similar circumstances. The regulator made it clear that both entities lack the necessary registration and approvals to operate in the Nigerian capital market.

The SEC strongly urged the public to avoid engaging with these entities, emphasising the risks of fraudulent schemes and potential financial loss that come with investing in unregistered organisations. To safeguard investors, the commission advised Nigerians to verify the registration status of any investment platform through its official channels before committing their funds.

The regulator also reaffirmed its commitment to ensuring transparency and investor protection in the Nigerian capital market. It reiterated its determination to clamp down on unregistered entities operating illegally within the sector.

Interestingly, the warning comes at a time when Risevest has intensified its advertising campaigns across radio, billboards, and social media platforms, encouraging Nigerians to invest on its platform. On its website, Risevest claims to be a technology firm providing financial services, noting that its investment products are offered through affiliates and third-party partners managed by its United States (US).-based parent company, Rise Vest Technologies Limited, incorporated in Delaware.

This development follows previous regulatory actions involving Rise Vest Technologies Limited. In August 2021, the Central Bank of Nigeria (CBN) obtained a court order to freeze the accounts of several fintech companies, including Risevest, for alleged “illegal foreign exchange transactions.” However, in July 2023, the CBN instructed banks to lift restrictions on the accounts of some affected companies, including Risevest.

The SEC’s latest warning highlights the need for investors to remain cautious and vigilant when considering investment opportunities, particularly from entities operating outside regulatory oversight.