The Securities and Exchange Commission (SEC) has ordered unlicenced financial investment firms in the country offering schemes and products at unreasonably high returns, to close down immediately or face the law.
It said the activities of these firms are in clear breach of various provisions of the Security Industry Act of 2016, Act 929.
“…Close down or risk being caught on the wrong side of the law,” SEC ordered in a new public notice issued Friday to warn the Ponzi schemes operating illegally in the country as investment firms.
According to SEC, it has taken note of the various activities of these unlincenced investment firms, which it labelled as “‘pyramid and ponzi schemes”
It said these firms were taking advantage of the unsuspecting public through various advertising platforms to rip them off their life savings.
“The unique selling proposition of theses schemes and products is the unreasonably high rates of return or interest per month or year promised the investor public,” it said.
These firms, SEC observed, were promising investors guaranteed returns ranging from 6%, 10%, 20%, 40% to 70% monthly, translating into 72%, 120%, 240%, 480% and 840% a year respectively.
SEC said the high rates of promised interest are mostly dollar denominated, noting proper disclosure on the risk and the ability to pay are not made by these entities.
“Offering such high guaranteed returns, non-disclosure of risk and ability to pay are tell-tale features of ‘pyramid and ponzi schemes’ where new or fresh money deposited by clients are essentially used to pay previous depositors since there is no real underlying investment in the first place,” it indicated.
It said once the pipeline for fresh deposits or investments dry up, it leads to “widespread default culminating in loss of the money” supposedly invested by the unsuspecting depositors or investors.
“The promise of high returns is in essence a guarantee of high risk, which is typically the stock in trade of pyramid and ponzi schemes,” it said, explaining, “high risk means you could lose your entire principal”.
The regulatory commission said it is not out there to “destroy anyone’s business” and that it is only executing its mandate of protecting the interest of investors.
It has thus advised the public “to be weary” of these schemes and desist from investing their lifesavings with them and urged them to report the activities of such firms for action to be taken.
Source: 3news
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You in correcting these you creating more mess.You have let these people to take their money and run off. Please Nan advice yourself."A police man in caught somebody who was riding motor without an crush helmet .He caught him all right but looking at the situation he bought one for this man". President Kuffour had chance of reducing the fuel but he refused till the last minute .And this is one of the things that led the NPP to opposition.
mention their names la
Right warning in the right direction, good write-up there.
The laws if Ghana has seen resurrection under the App government. Pls let all the investors go for the their gold since according to Menzgold customers purchased gold is sitting there save