The Securities and Exchange Commission (SEC) on Thursday warned Nigerians against engaging in a fraudulent online investment scheme tagged ‘Loom Money Nigeria’.
The Acting Director-General of the Commission, Ms. Mary Uduk gave the warning at a news conference held in Abuja.
A statement by SEC’s Head of Media, Mrs. Efe Ebelo said Uduk who was represented by the Acting Executive Commissioner, Operations of SEC, Mr Isyaku Tilde said ‘Loom Money Nigeria’ had taken over the country’s social media space.
She said that the dubious scheme which targets young people, lures them into participating in a pyramid model of the Ponzi via social media platforms like Facebook and WhatsApp.
She revealed that the fraudsters operating the scheme lure young Nigerians to invest as low as ₦1,000 and ₦13, 000 and to get as much as eight times the value of their investment in two days.
“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.
“They lure the investing public to participate by joining various Loom WhatsApp groups to invest as low as ₦1, 000 and ₦13, 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.
“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 peoples’ invested sum. Also, its operation is not registered by the Commission,” Uduk said.
Loom Pyramid Scheme is not new to the world. Last month, Daily Mail UK reported that the scheme has resurfaced online all over the world, with different names such as ‘Loom Circle’, ‘Fractal Mandala’ and ‘Blessing Loom’.