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Loom is Ponzi scheme, engage in it at your own risk, SEC warns Nigerians

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THE Securities and Exchange Commission (SEC) has warned the general public about the dangers of engaging in an online Ponzi scheme known as ‘Loom Money Nigeria’ that is currently making waves in the country.

Acting Director-General of the commission, Mary Uduk, said this during a press conference organised by the Ministry of Finance in Abuja on Thursday.

Uduk was represented at the press conference by Isyaku Tilde, the Acting Executive Commissioner, Operations of SEC, who warned that anyone engaging or investing money in the Loom Ponzi scheme, does so at his or her own risk.

“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’,” Tilde was quoted as saying on Thursday by TheNation newspaper.

“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 little as between N1000 and N13,000 and get as much as eight times the value of the investment in 48 hours.

“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.

Acting Executive Commissioner SEC, Isyaku Tilde, Finance Minister Zainab Ahmed, and Comptroller-General of Customs, Hameed Ali, at the press conference held at the Ministry of Finance on Thursday. Photo credit: TheNation newspaper.

“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.

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“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. Please note that anyone that subscribes to this illegal activity does so at their own risk.”

Tilde said that an inter-agency committee known as the Financial Services Regulation Coordinating Committee (FSRCC) is currently collaborating with security agencies on how to bringing the Loom platform down.

This recent warning by SEC is coming barely a week after the Central Bank Nigeria (CBN) also issued a similar warning urging Nigerians not to invest their money in the Loom scheme.

“Whether it is Gloom or Loom or MMM or whatever, the CBN has not licensed any of them,” Isaac Okorafor, CBN’s spokesman said.

“We can only speak about the ones that are licensed. We are warning Nigerians that any institution that collects deposit but is not licensed by the CBN nor insured by the NDIC (National Deposit Insurance Commission), is illegal.”

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