Loom Money Nigeria is on its first spotlight from SEC, as the Nigerian securities regulator has said that all that glitters may not be gold. In fact, to be sure, SEC used such words as Ponzi Scheme and fraudsters. In a statement, it said:
“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.
Daniel Ogbarmey Tetteh
Unlike MMM that had a website and the promoter known, the people promoting Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and WhatsApp.’’
The Loom Money Nigeria Warning And Why?
A statement by SEC’s Head of Media SEC said Loom Money Nigeria has taken over the social media.
Warning!
SEC warned that fraudsters are currently running an online investment scheme tagged “Loom Money Nigeria.’’
SEC Lists Out The Targets?
SEC said the scheme targets young people, luring them to participate in a pyramid model of the Ponzi, using such social media platforms like Facebook and WhatsApp. SEC said young Nigerians get lured to invest as low as N1,000 and N13,000 and to get as high as eight times the value of the investment within 48 hours.
SEC said the venture was a Ponzi scheme, where returns would be paid from other people’s invested funds, adding that it had no tangible business model.
“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria,’’ it said. “We therefore wish to notify the investing public that the operation of this investment scheme is not registered by the Commission.”
SEC, therefore, advised the public to avoid committing their hard earned money to the scheme, adding that anyone that subscribed to the illegal activity did so at his own risk.
Loom Money in Nigeria is also known severally as Jack Loom, Catherine Loom, among others, depending on who created the accounts.
Action To Be Taken By Both Sides
SEC, however, assured that an inter-agency committee, Financial Services Regulation Coordinating Committee, was working on the issue, and that the commission was also collaborating with security agencies to track them down.
In 2017, the Nigerian Deposit Insurance Corporation, NDIC, said that an estimated three million Nigerians lost N18 billion in the MavrodiMundial Movement, MMM, ponzi scheme.
From SEC’s statement, it appears that until then, nothing yet is precisely going to loom out of Loom Money Nigeria. So, save your money until then.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.