SEC, NFIU Sign MoU to Deepen Collaboration against Fraudulent Transactions

The Securities and Exchange Commission (SEC) and the Nigerian
Financial Intelligence Unit (NFIU) have signed a Memorandum of
Understanding (MoU) with a pledge to collaborate in combating
criminal tendencies in the Nigerian capital market and ensure that
suspicious transactions are stamped out.

This is coming as NFIU NFIU moves to ensure that the financial
system is rid of shell companies.

Shell companies exist only on paper, without an office and no
employees, but may have bank accounts or may hold passive
investments or be the registered owners of assets.

They may serve as vehicles for business transactions without
having any significant assets or operations and are. sometimes used
for illicit financial flows, tax evasion and avoidance and money
laundering.

Acting Director General of the SEC, Ms. Mary Uduk, who spoke in
Abuja during the signing of a Memorandum of Understanding ( MoU)
with the NFIU, said the collaboration was necessary in order to
close ranks in the face of insider dealings, re-awakening of Ponzi
schemes, cybercrime and other fraudulent activities that have
engulfed the market in the last few years.

A statement issued by the Commission’s Head, Public Affairs, Efe
Ebelo, said Uduk noted that the SEC is paying close attention to
digital transactions and was in the process of amending its rules
to capture such transactions.

She disclosed that the Commission already has regulations that
prohibits shell companies from operating in the capital market and
implored the NFIU to assist with solutions to track suspicious
transactions as they occur.

“If we have solutions that will help us track transactions, it
will reduce incidence of insider dealing greatly. We would be very
willing to collaborate with you on that in our determination to
ensure that our markets are efficient and transparent and all
investors are protected,” Uduk said.

According to her,, some areas where the MoU seeks cooperation of
both agencies include training, secondment of middle cadre officers
between both organisations, cross border monitoring, repatriation
of stolen funds from the capital market and prosecution of
offenders, among others.

On the rising spate of Ponzi schemes in the country, Uduk
stressed the need for more collaboration between both organisations
and further sensitization to ensure unsuspecting Nigerians do not
continue to lose their hard-earned money.

In his remarks, Director of NFIU, Mr. Modibbo Tukur, Commended
the SEC for the relationship that has existed between both
organisations and assured that the NFIU would continue to play its
part in ensuring that the financial system is safe for Nigerians to
operate.

To this end, Tukur disclosed that the NFIU is making efforts to
ensure that the financial system is rid of shell companies adding
that for companies to exist, they should have physical
addresses.

“If anyone establishes a company, it has to be a company indeed
and we have to be firm on this. This has become more important now
given the roll out of the ECOWAS single currency, because with
that, we know that capital and investments will move across borders
and it is a single currency. So we have to step up regulation to
avoid fraudulent transactions.

“We will commence by September and some companies would have to
be deregistered if they do not meet the criteria. We will publish
the parameters and also give them enough time to regularise after
which those that do not comply before the deadline will be shut
down. If you have an empty company hanging in the system, it is a
potential danger and we should not allow it to thrive” Tukur
said.

Tukur stated that by the time the NFIU commences the due
diligence on the shell companies, the information will be shared
with the SEC for their further action and commended the SEC on its
regulation that does not presently allow shell companies to operate
in the capital market.

“Analysis would now be digital so the organisation would be able
to share information on transactions as fast as possible adding
that the capital market being a very sensitive one, care has to be
taken on information dissemination to avoid disruptions,” he
added.