SEC Warns Investors’ to Desist from Alpha Trust Investment Club

Kayode Tokede

The Securities and Exchange Commission (SEC) yesterday warned the investing public to desist from dealing with Alpha Trust Investment Club, stressing that the company not registered under the apex capital market regulating body.

SEC in a statement said its attention has been drawn to the activities of Alpha Trust Investment Club, an entity that is believed to be facilitating investment to the public.

The Commission, however, notified the investing public that Alpha Trust Investment Club and its investment schemes are not registered/authorized by the Commission.

SEC in a statement added that, “Investment promoters and the general public are by this NOTICE warned that it is a serious contravention of the Investments and Securities Act 2007 for any person or entity to operate as an investment professional or carry on investment and securities business without prior registration with the Commission.”

The Commission strongly advises investors to always verify the registration status of any person or entity and the investment product(s) being promoted before dealing with such person or entity.

The Commission in June 2024 warned that investing in meme coins, including $Davido, is highly risky and should be done with a full understanding of the associated risk.

The Commission in a circular stated that, “The attention of the SEC has been drawn to a meme coin known as “$Davido” allegedly linked to the popular Nigerian singer, David Adedeji Adeleke AKA Davido.

“Generally, meme coins are cryptocurrencies inspired by memes and internet jokes. They are often envisaged as a fun, light-hearted cryptocurrencies promoted through a social media community and sometimes through celebrity endorsements”.

The SEC further stated that Meme coins are also not intended to serve as a medium of exchange accepted by the public as payment for goods and services, or as digital representation of capital market products such as shares, debentures, units of collective investment schemes, derivatives contracts, commodities or other kinds of financial instruments or investments.

The Commission therefore advised the general public that meme coins lack fundamental value and are purely speculative.

“The general public is further WARNED that investing in meme coins, including $Davido, is highly risky and should be done with a full understanding of the associated risk.

“Capital Market Operators are by this Notice warned not to associate with instruments that fall outside the SEC’s regulatory purview. Such instruments should not in any manner be distributed or monitored through any capital market mechanism”.

The SEC also emphasised that the Commission does not recognize $Davido as an investment product or investable asset class under its regulatory purview, as such individuals who patronize it, do so at their peril.

“The Commission will continue to monitor developments within the ecosystem and will not relent in deploying its regulatory powers as and when required,” the circular added.