The Director-General of the Securities and Exchange Commission (SEC), Dr James Klutse Avedzi, has urged the public to exercise caution and avoid investing in schemes operated by unlicensed financial institutions that promise unusually high returns.
He also advised prospective investors to verify the licensing status of companies offering investment and capital market products before committing their funds.
Dr Avedzi was speaking at a one-day financial literacy and investment awareness forum organised by the SEC at Sunyani in the Bono Region yesterday.
The programme, held on the theme, “Building Financial Confidence for a Brighter Tomorrow”, brought together financial experts, industry practitioners, members of the security services, traditional authorities and students to discuss practical strategies for wealth creation, investor protection and the role of the capital market in national development.
Dr Avedzi said thousands of families had suffered the loss or lock-up of their savings through unlicensed investment schemes that promised high and steady returns.
He stated that some investors had also lost their money through poorly managed schemes, warning that the promise of high returns should not be mistaken for the security of an investment.
“Let us be clear. A promise of high returns is not protection. What is protection is a licence,” the SEC Director-General stressed.
Dr Avedzi disclosed that the ongoing process to overhaul the Securities Industry Act, 2016 (Act 929), would introduce an investor protection fund.
He explained that the proposed fund would provide a framework for partial compensation for investors who suffered losses as a result of infractions by licensed operators.
However, he cautioned that the proposed arrangement should not be interpreted as an endorsement of fraudulent investment offers or a reason for investors to disregard due diligence before investing.
The Vice-Chancellor of the Sunyani Technical University, Professor Kwadwo Adinkrah-Appiah, said the Bono Region had suffered greatly from fraudulent financial schemes in the past, resulting in the loss of savings and the deaths of several people.
He noted that the victims included farmers, public servants and business operators, adding that the resulting losses had adversely affected the local economy and the country as a whole.
Professor Adinkrah-Appiah commended the SEC for organising the financial literacy programme, saying it would help educate the public and raise awareness of fraudulent investment schemes.
For his part, the Bono Regional Minister, Mr Joseph Addae Akwaboah, indicated that protecting investors was not the sole responsibility of the regulator but required the collective efforts of all stakeholders, including the media and religious institutions.
He underscored the need to intensify public education on the dangers of investing in unapproved and fraudulent financial products.
During a presentation at the forum, participants were taken through topics including savings, investment products and practical ways of identifying and avoiding investment scams.
FROM DANIEL DZIRASAH, SUNYANI
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