SEC warns Nigerians against ‘loom money’

The Securities and Exchange Commission on Thursday warned Nigerians over an online investment scheme, labelled ‘Loom Money Nigeria’.

Ms Mary Uduk, the acting director-general of SEC, issued the warning in Abuja during a press briefing.

Uduk said Loom Money Nigeria is a pyramid scheme which operates on social media and lures Nigerians to invest as low as N1,000 naira and N13,000 and get as much as eight times the value of the investment in 48 hours.

She stressed that the venture has no tangible business model, as returns would be paid from other people’s invested funds.

“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.

“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 people’s invested sum. Also, its operation is not registered by the commission,” the acting director-general of SEC concluded.