Islamabad: According to press reports, Pakistan’s Securities and Exchange Commission (SECP) issued a warning to residents not to invest in Ponzi and quick profit schemes on Thursday (October 28). The SECP has issued a warning, stating that some companies are operating in the country under false pretences of being registered and authorised by the SECP, which is incorrect.
It is the SECP’s second public warning in the last year about investing in pyramid marketing models, referral marketing, multi-level marketing (MLM), and foreign exchange investment schemes. Running an MLM, Pyramid, or Ponzi Scheme is prohibited, according to Section 301 of the Companies Act, 2017.
The authorities have also warned the general people to avoid investing in such companies because they are not licenced and do not have stakes in the country, making it more difficult to avoid and recover financial losses. According to the SECP, the government has also taken legal action in the public interest against similar ponzi scams.