A federal court has convicted 21 corporate entities for operating illegal investment schemes without statutory authorisation, imposing total fines amounting to N630 million on the affected organisations.
The convictions followed prosecutions brought by the Economic and Financial Crimes Commission (EFCC), which accused the companies of running financial operations outside the purview of regulatory approval in clear breach of national financial laws.
According to the anti-graft agency, the actions of the convicted firms violated Section 57 (1) of the Banks and Other Financial Institutions Act (BOFIA) of 2020, as detailed in court proceedings. The legislation prohibits any company from carrying out banking or other financial businesses in Nigeria without valid licensing from the appropriate regulatory authorities.
Crackdown on Unlicensed Financial Operators
The latest convictions form part of an intensified regulatory and enforcement push by Nigerian authorities to curb the proliferation of Ponzi schemes and unlicensed fund managers that routinely exploit retail investors. Over recent years, federal agencies have intensified scrutiny on entities promising unsustainable high returns on capital to unsuspecting members of the public.
Under the provisions of BOFIA 2020, operating a financial institution without a licence is a criminal offence punishable by substantial fines and possible prosecution of corporate directors. The N630 million cumulative penalty imposed across the 21 firms signals a zero-tolerance approach by the judiciary toward unlawful financial intermediaries operating within the domestic market.
Financial regulators have repeatedly cautioned the Nigerian public against patronising unregistered investment platforms, urging citizens to verify the licensing status of any entity offering wealth management or deposit-taking services with the Central Bank of Nigeria or the Securities and Exchange Commission.
The EFCC is expected to enforce the payment of the fines and continue its investigation into other similar entities operating without legal authorisation across the country.
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