SEC cracks down on investment scams

By Kingsley Webora TANKEH 

The Securities and Exchange Commission (SEC) Deputy Director-General in charge of legal, Deborah Mawusi Agyemfra, has revealed that the regulator is actively investigating hundreds of fraudulent investment schemes prevalent in northern parts of the country – warning investors, especially the youth, not to be swayed by unrealistic returns promised by unregulated investment schemes.

Speaking at Ghana Stock Exchange’s ‘Ring the Bell for Financial Literacy’ programme in Accra, Mrs. Agyemfra  disclosed that since 2021 the regulator has investigated 271 companies for running fraudulent investment schemes – with a recent operation in northern Ghana.

“Our investors are now wondering which one is legitimate and which is not. Investor confidence has been affected and we need to get it back,” Mrs. Agyemfra stated while enumerating the perils of an unregulated digital market.

This comes at a time when technology has liberalised acces to investment opportunities via the internet and other trading platforms. According to Mrs. Agyemfra, SEC’s crackdown includes issuing directives to cease operations, working with law enforcement and even having SEC staff conduct “street shopping” and meeting to gather evidence on fraudulent promoters.

She cited her son’s recent encounter with fraudsters to show how prevalent investment scams are – warning the public to be wary of investment schemes that offer unconscionable and unrealistic returns higher than legitimate opportunities.

“Just yesterday, my son got scammed when he was buying something,” Mrs. Agyemfra shared, indicating that even the most informed people are not immune to digital fraud.

She emphasised: “If an investment seems too good to be true, it probably is”.

She outlined some critical ‘red flags’ that should signal danger to investors, including pressure to recruit, use of complex jargon, unregistered operators and guaranteed returns.

“Investments have inherent risk. So schemes that say you get 30 percent every month are major warnings,” she added.

She indicated that SEC is now focusing its investor education programmes on vulnerable groups, including religious congregations and old-school networks where scammers often find easy prey.

While the event was framed around GSE’s new educational platform, the message from regulators dominated – highlighting the urgent challenge of navigating a digital financial landscape where innovation and fraud are intertwined.

Managing Director-GSE Abena Amoah acknowledged the double-edged nature of this digital revolution. “This progress also brings new challenges such as cybersecurity threats, cyber fraud and the growing influence of unregulated digital assets,” she noted.

She however celebrated Ghana’s 44 million mobile money accounts, crediting the digital revolution with promoting financial inclusion.

“Technology continues to reshape the financial landscape. Innovation has made finance accessible, faster, more efficient and inclusive,” she noted.

Ms. Amoah detailed GSE’s own “steady and impactful” digital transformation, which includes a fully automated trading system certified to international information security standards.

She however expressed GSE’s commitment to creating a “financially literate generation” through outreach programmes, which have already reached over 900,000 students nationwide.

“Today’s youth debate is built on our mission. It encourages you to continue exploring and using technology and innovation in very responsible ways while understanding the risks that come with it.”

‘Ring the Bell for Financial Literacy’ was organised to mark the investor week celebration by the Exchange. It was on the theme ‘Navigating Risk in a Digital Era on the Capital Market’. At the event, Roman Ridge School and Alpha Beta Christian College debated on the topic ‘In a Digital World, Are Capital Markets Safer and More Inclusive?’

Roman Ridge School beat Alpha Beta Christian College by one point to win the trophy.

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