The Securities and Exchange Commission (SEC) has issued a stern warning to Nigerians, cautioning against investing in Risevest (Victoria Island) Cooperative Multipurpose Society Limited and Stecs (Alausa) Multipurpose Cooperative Society, popularly known as Stecs.
In a circular released over the weekend in Abuja, the SEC declared that both entities are neither registered nor authorized to operate in Nigeria’s capital market. The Commission further described their activities as unapproved investment schemes targeting unsuspecting individuals.
Unregistered Investment Schemes
According to the SEC, both Risevest and Stecs are involved in unauthorized capital market activities.
SEC’s Statement on Risevest:
The Commission highlighted that:
“Risevest (Victoria Island) Cooperative Multipurpose Society Limited is engaging in capital market activities by inviting the public to invest in its various investment schemes.”
SEC’s Statement on Stecs:
Similarly, the SEC noted that:
“Stecs (Alausa) Multipurpose Cooperative Society is engaging in capital market activities by inviting the public to invest in its Stecs Commodity Mudarabah Investment Series I.”
Neither of these entities has the necessary registration or authorization to operate in the Nigerian capital market.
Public Advisory: Avoid Unregistered Investments
The SEC has strongly advised the public to avoid investing in any schemes offered by these two organizations.
Key Warnings:
- Unauthorized Operations:
The SEC emphasized that Risevest and Stecs are not registered to operate in Nigeria’s capital market. - Risk of Fraud:
The Commission warned that engaging with unregistered entities exposes investors to fraudulent activities and potential financial losses. - Verify Before Investing:
The SEC urged Nigerians to verify the registration status of any entity offering investment opportunities through its official channels.
“The SEC advised the public to refrain from engaging with Risevest and Stecs in respect of any business pertaining or relating to the Nigerian capital market.”
SEC’s Role in Protecting Investors
The warning is part of the SEC’s broader mission to ensure transparency and safeguard investors within the Nigerian capital market.
- The Commission reaffirmed its commitment to clamping down on unregistered entities operating illegally.
- It also pledged to intensify efforts to educate the public about the risks of engaging with unauthorized investment platforms.
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What You Should Know
About Risevest
On its official website, Rise Vest Technologies Limited describes itself as a technology firm providing financial services. The company claims its services are available to residents of Nigeria, with investment products offered through affiliates and third-party partners managed by Rise Vest Technologies Limited, incorporated in Delaware, USA.
However, the SEC’s warning comes amid an increase in advertisements by Risevest on radio, billboards, and social media platforms, urging Nigerians to invest in its schemes.
Legal Challenges Faced by Fintech Companies
This is not the first time Risevest and similar fintech companies have faced regulatory scrutiny.
- Account Freezes in 2021:
In August 2021, the Central Bank of Nigeria (CBN) obtained a Federal High Court order to freeze the accounts of Rise Vest Technologies Limited and other fintech companies, citing investigations into illegal foreign exchange transactions. - CBN’s Actions on Suspicious Activities:
- Earlier in 2021, the CBN froze 194 bank accounts belonging to firms and Bureaux de Change operators over suspicious activities.
- However, in July 2023, the CBN lifted restrictions on 440 accounts, including those of fintech firms like Bamboo and Risevest.
Despite the lifting of restrictions, the SEC’s recent warning highlights ongoing concerns about Risevest’s compliance with Nigerian capital market regulations.
Editor’s Note.
The Securities and Exchange Commission’s warning against Risevest and Stecs underscores the importance of vigilance when choosing investment platforms. Nigerians are advised to:
- Avoid unregistered entities to reduce the risk of fraud and financial loss.
- Verify all investment opportunities through official SEC channels.
As the SEC continues its efforts to regulate and protect the Nigerian capital market, investors are encouraged to prioritize due diligence before committing to any financial schemes.
