Invest With Confidence

Invest With Confidence

Have this imaginary scene together: A group of investors sitting around a conference table somewhere in Nigeria, with a representative from XYZ Nigerian Company Ltd ready to pitch. The representative thanks all for coming and with a smile announces to the audience that the company brings a new and juicy investment scheme about to be launched in the investment market. And that with a minimum investment of $50,000, they could earn up to 50 per cent returns within three months.

The investors raise their eyebrows in excitement, impressed are ready to plunge in their life savings.

Sounds familiar?

Note: This company is not regulated by the Nigerian Security and Exchange Commission and the Investors only have  shallow knowledge of the Company’s track records as well as the composition of its Board of Directors.

You would think that after the era of MMM, no single investor would ever fall victim of such operations ever again right? At least not in Nigeria. Well do not be shocked to learned that many are still losing their live savings to investments that actually seem genuine at first glance.

Truth be told, we get to see unsustainable investments schemes being rolled out on daily basis to well- meaning investors who believe that such will pay off. Aside unregulated businesses in Nigeria operating without proper oversight and actively engaging in unscrupulous activities, leading to significant instances of dubious investment schemes, there are also legitimate companies who are authorized to manage investments but who eventually mismanage the said investments; still resulting in loses for the investors . Some of these businesses lure unsuspecting investors with promises of returns on their investments, but ultimately fail to deliver on these promises. Some even vanish with the invested funds, not to talk of the promised returns

Lack of proper regulation and monitoring of businesses we must say, can create a conducive environment for scammers, who exploit legal loopholes, flout regulations and take advantage of loopholes in the Nigerian financial system, leading to significant financial loses for investors. This begs the question


Investors in Nigeria can rest easy knowing that the Security and Exchange Commission works hard to protect investors from financial scams. With strict regulations in place, fraudulent activities are quickly identified and dealt with.

It is however troubling to know that even companies regulated by the Security and Exchange Commission may still engage in unapproved activities. The authorities can only know what is presented before them; mostly by complaints from investors.

It is therefore encouraged that you take steps to verify any company pitching investments opportunities to you before investing your funds in them

We have put together below, few steps you may follow to ensure the veracity and sustainability of investments scheme before making investments into them

  • Conduct a corporate search on the Company: A corporate search or due diligence search at the Corporate Affairs Commission, Maitama, Abuja will expose most information you need to know about the Board of Directors, Shareholders, the activities of the Company as well as any affiliations whether local or international. A company cannot claim affiliation with an international company without proof of documentation in the company’s record. Further, a Board of Directors made up of only husband and wife might not be a red flag but it is definitely a caution.  A balanced Board of Directors with unrelated members from different regions will make a more objective decision about your investment than family members board of Directors.  The composition of the shareholders may also give a hint about the operations of the company. Same directors, same shareholders trend seen in most companies reflects a monopoly kind of ownership with minimal oversight functions on the activities of the company. You may never get to know if your investment is in trouble until it is too late. But where most shareholders are not directors, they will keep check on the activities of the directors.
  • Request Evidence of Registration with SEC and FRC (For Public Companies): As an investor, you have the right to demand evidence of registration with SEC. Registration with SEC, may not suffice; go a step further to verify if the company regularly complies with all the guidelines of the SEC. Once the company is in good standing with SEC, you have at least crossed one hurdle. It will be worth it taking the pains to peruse the documents presented to you and verifying them at SEC. For Public companies, registration with the Financial Reporting Council of Nigeria assures you that the financial statements of the Company will at least uphold the requisite accounting and reporting standards.
  • Check the Track Records of the Company: Here is another vital step to take, as this will give answers to much doubts going through your mind. You really want to be sure the Company is trustworthy, and has high value of integrity. What have they done in the past? How long have they existed. Are there complaints against the Company? Have they been faithful in paying returns to their investors?
  • Verify the Actual Activity of the company: What is the company actually doing with investors’ money?  For instance, is it crypto currency? This is currently banned in Nigeria, reasons being that SEC does not currently regulates this digital currency. Assuming there is conflict between you and the company on crypto currency, which court has jurisdiction to entertain your matter? And under which law will you bring your claim? Yes, it is a known fact that Security and Exchange Commission is the body regulating investments in Nigeria, empowered by the Investment and Security Act, of which where there is dispute the parties appear before the Investment and Security Tribunal. So in the case of crypto currency investment that is expressly banned by SEC, your means of resolution is already limited. Note that we are not against your investment into digital assets. If you find a jurisdiction where it is allowed, feel free to invest after your due diligence of course. We are hoping that Nigeria will find a way of legalizing crypto currency soon. Some other activities include farming, manufacturing etc. Where a company tells you your money will be invested in agrobusiness, do well to at least know where the farm or industry is located. Many have lost their investments to non-existing farms and industries. Investors should be vigilant so as not to throw their life savings into  the drainage.
  • Read in between the lines the Company manual, Policy and the Scheme: Read to understand the company’s manual and policy. Feel free to engage the services of a lawyer to read through the lines and explain to you phrases you do not understand. Are there effort put in place in the company policy to secure investors fund such as Investors Protection Funds? What are the means of communication to investors? Do investors have access to  their investment records? All these are concerns an investor should harness before investing his/her money.

By implementing these tips, you can INVEST WITH CONFIDENCE knowing that you have at least done your part. Stay glued for more tips.

Enhance your business operations, reduce expenses, and boost your revenue by 30% with our expert legal advice. Subscribe to our newsletter today to access valuable resources and essential tips. Our team of professionals is ready to guide you on how to effectively run your business, save costs, and achieve substantial growth. Don’t miss out on this opportunity; reach out to our experts now!

Scroll to Top