SEC Seals Growing Circle over Illegal Fund Management
The Securities and Exchange Commission (SEC) has sealed off the premises of a Lagos-based network marketing company, Growing Circle International, for engaging in illegal fund management activities. SEC explained that the company was shut down for carrying out investment operations that fell within fund management without registration with the apex regulator.
The commission, in a statement on Tuesday, revealed that it had established that the company’s activities also constituted an infraction of the Investments and Securities Act, 2007.
The statement read in part, “They have not registered with SEC and the commission has powers according to Section 13 (w) of ISA 2007 to shut down any company carrying out capital market activities without due registration.
“The mode of operation of the company is that for a new entrant, registration is N10, 000 and the person is not entitled to products while the second category has a registration fee of N16, 000 that entitles the registrant to receive products. For anyone to come under the company, he has to come under an up liner since the company engages in networking business.”
It added that for the networking business, the least stage was a starting point with a minimum registration of $50 and an incentive of $15 for a member that introduced two down liners.
It was gathered that the company also engaged in free seminars at its head office for people to learn more about the products and the money-making business with an unbeatable compensation plan and huge bonuses.
However, SEC disclosed that after registration, the members claimed that they did not get any products from the company and all efforts to retrieve their funds proved abortive.
While the company claimed to have a factory in Ogun State, the said factory could not be located even though the products were on display at their Lagos office.
SEC Management said the closure was to end unlawful activities of the company against unsuspecting investors and, therefore, urged investors to ensure that they only deal with fund managers that were registered with the commission.
It added, “The accounts of the company have been frozen and the promoters have been arrested by the Nigeria Police Force and are undergoing interrogation. The commission wishes to notify the investing public that the company is not licensed to carry out investments business of any type and as such its operations are illegal.
“SEC, therefore, advises the public to exercise due diligence and caution in the course of making investment decisions. A valid licence of lawful operators can be obtained on the commission’s website by members of the public to confirm the licences of firms with which they intend to carry out investment activities.”