The Securities and Exchange Commission (SEC) has warned Nigerians to run away from a new online fraud packaged as investment scheme tagged ‘Loom Money Nigeria’.
This was made known on Thursday by the Acting Director General of SEC, Ms Mary Uduk, who stated that Loom Money Nigeria is a pyramid scheme which targets youths whom she believes will get their hands burnt if they fall for it.
Represented by Acting Executive Commissioner, Operations of the SEC, Mr. Isyaku Tilde, the SEC boss stated that the pyramid scheme makes use of social media platforms like Facebook and WhatsApp to attract youths with promises of offering them eight times as much as they invest in 48hrs. The least investment is N1000.
Decribing it as a Ponzi scheme, Uduak said:
“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’. The platform has embarked on an aggressive online media campaign on Facebook and whatsapp to lure the investing public to participate by joining various Loom whatsapp groups to invest as N1000 and N13,000 and get as much as 8 times the value of the investment in 48 hours.
“Unlike MMM that had a website and known promoter, the people promoters of Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and Whatsapp. 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…”
“We therefore wish to notify the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi scheme, where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission. ”
Uduk, therefore, advised the general public to distance themselves from it: “Please note that anyone that subscribes to this illegal activity does so at their own risk.”