SEC cautions investors against fraudulent investment schemes

The Director-General of Ghana's Securities and Exchange Commission (SEC), Dr James Klutse Avedzi, has warned investors against falling prey to fraudulent investment schemes. Scammers often use urgency and pressure to lure people into making poor investment decisions. Dr Avedzi advised the public to verify the licensing status of investment firms before investing and to remain cautious of any offers claiming unusually high returns.

He emphasized the importance of resisting pressure, particularly when presented with a deadline to act or a request to bring a friend. Urgency, according to Dr Avedzi, is a common tactic used by scammers to manipulate victims.

During the SEC's "Time with the SEC" program in Sunyani, in the Bono Region, Dr Avedzi highlighted that fraudulent investment offers are now prevalent on social media platforms such as WhatsApp, Telegram, and TikTok. Some of these schemes employ fake endorsements and AI-generated videos to appear more credible. He emphasized that some fraudulent schemes promised returns of 30 percent or more per month, urging investors to be wary of such promises.

Dr Avedzi outlined three essential habits for making sound investment decisions: verifying the licensing of investment firms, maintaining scepticism towards guaranteed returns, and resisting pressure. He stressed that financial literacy is crucial for everyone, regardless of income level or occupation, as everyday decisions about spending, saving, and investing can significantly impact one's financial future. "Financial literacy is not a luxury. It is a life skill. And anyone can learn it starting from today," he stated.

Building wealth, according to Dr Avedzi, involves disciplined saving, purposeful financial planning, and informed investment decisions, rather than relying on schemes promising quick returns. He encouraged Ghanaians to save consistently, even if the amount is small, and to explore investment opportunities that align with their financial goals, risk tolerance, and investment timelines.

Furthermore, he advised prospective investors to fully understand the products they are investing in, as bonds, shares, and collective investment schemes each carry different levels of risk, returns, and liquidity. Dr Avedzi clarified that there is no single best investment product; instead, the right choice depends on an individual's specific goals and investment horizon.

The SEC's initiative aims to educate and empower Ghanaians to make informed financial decisions, ultimately fostering a culture of financial confidence for a brighter tomorrow.