SEC Cracks Down on Unlicensed Online Investment Firms as New Securities Law Nears Passage

The Securities and Exchange Commission (SEC) has vowed to intensify its clampdown on unlicensed online investment platforms and Ponzi schemes that continue to defraud unsuspecting Ghanaians through social media and digital channels.

According to the Commission, the move forms part of a broader strategy to sanitize Ghana’s investment landscape, protect investors, and promote confidence in the formal capital market.

Speaking at the second edition of the “Time With SEC” programme in Koforidua, Director-General of SEC, Dr. James Klutse Avedzi, revealed that the newly amended Securities Industry Act—currently under review—will give the Commission stronger powers to regulate and prosecute illegal investment activities.

New Law to Strengthen SEC’s Enforcement Powers

Dr. Avedzi disclosed that the revised law, which amends the existing Securities Industry Act, 2016 (Act 929) and its 2021 Amendment (Act 1062), is expected to be passed into law by the end of 2026.

“The SEC is strengthening its oversight and regulatory powers. The overhaul of the Securities Industry Act will be a more robust law for effective regulation,”
— Dr. James Klutse Avedzi, Director-General, SEC.

He explained that once passed, the updated legislation will empower SEC to shut down, prosecute, and sanction both individuals and companies involved in unlicensed financial operations.

The Director-General noted that the review was prompted by the proliferation of online Ponzi schemes—many of which operate through mobile applications, social media, and foreign-hosted websites—promising unrealistic investment returns to unsuspecting investors.

Collaboration with Law Enforcement Agencies

Dr. Avedzi further revealed that SEC is working closely with the Ghana Police Service, the Economic and Organised Crime Office (EOCO), the Judiciary, and the Attorney-General’s Department to ensure that fraudulent entities are investigated and punished.

“We are working closely with the Ghana Police, EOCO, the Judiciary, and the Attorney-General’s Department to ensure that individuals and entities that defraud investors face the full consequences of the law,”
— Dr. Avedzi stated.

He emphasized that the inter-agency collaboration is key to tracking digital investment scams that operate across multiple jurisdictions, often beyond the reach of traditional enforcement mechanisms.

Progress on the New Bill

According to Dr. Avedzi, the proposed Securities Industry (Amendment) Bill has undergone extensive stakeholder consultations and technical review. The document is expected to be submitted to the Ministry of Finance for approval before it proceeds to the Attorney-General’s Department and subsequently to Parliament.

“The new bill will soon be submitted to the Ministry of Finance for consideration and onward transmission to the Attorney-General’s Department. It will then be laid before Parliament for passage into law—potentially before the end of next year, 2026,”
— he disclosed.

The new law is also expected to tighten licensing requirements for market operators, improve corporate governance standards, and enhance consumer protection mechanisms across the investment ecosystem.

‘Time With SEC’: Promoting Financial Literacy and Investor Education

The “Time With SEC” initiative, which is the Commission’s flagship public education programme, is designed to raise awareness about sound investment practices, licensed market operators, and safe investment channels available to the public.

Dr. Avedzi emphasized that the outreach is crucial to curbing the surge of fraudulent investment offers that often exploit the ignorance of retail investors.

“We realize that many people still do not understand how the investment market works. That is why SEC continues to engage the public to explain how to identify legitimate products and avoid online scams,”
— he added.

The Commission’s recent outreach in Koforidua follows similar sessions in the Volta Region, with plans to expand the programme to other regions before the end of the year.

Growing Online Threats

Analysts note that online Ponzi and pyramid schemes have evolved significantly over the past decade, using digital wallets, cryptocurrency platforms, and “investment clubs” to lure victims.

Many of these schemes promise returns as high as 50% in days, use social media influencers to gain credibility, and often collapse after a few months, leaving thousands of investors in financial distress.

The SEC has consistently warned the public against patronizing unlicensed platforms, urging Ghanaians to always verify the registration status of any investment company through the Commission’s official channels.

Outlook from Accra Business News

The passing of the amended Securities Industry Act is expected to mark a turning point in Ghana’s regulatory landscape. By tightening enforcement and enhancing investor education, SEC hopes to restore confidence in the country’s capital market and curb financial fraud in the digital era.

Dr. Avedzi reaffirmed that SEC’s mission remains clear: to protect investors, promote market integrity, and support Ghana’s long-term financial stability.

Source: Accra Business News