Why SEC says Loom Money Nigeria is a scam
Ms Mary Uduk, the acting director-general of SEC, released the warning in Abuja, during a press briefing which held on Thursday 16th of May 2019.
Ms Uduk stated that Loom Money Nigeria is a pyramid plan (scheme) which uses the social media for its operations and convince 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 2 days.
Ms Uduk in her statement made it clear that Loom Money Nigeria has no tangible business model, as returns would be paid to investors the more people continue to invest in the scheme.
Read her statement below;
“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.”