Ugandans cautioned on Ponzi schemes

The Capital Markets Authority (CMA) has warned Ugandans to be wary of a surge in economic crimes, especially illegal fund managers and fictitious pyramid and Ponzi schemes.

The CMA’s attention was drawn to Alliance Motion Global, one of several firms that is being investigated by the Criminal Investigations Department (CID).

Miriam Musaali, the CMA’s director for legal and board affairs said that they have noted with great concern that a company holding out as “Alliance Motion Global” is illegally offering shares and providing investment advice to members of the public.

She informed the general public that Alliance Motion Global is not licensed by the CMA and as such, members of the public are strongly cautioned against conducting any business with the said company.

She explained that any person who undertakes any dealings with them does so at his/her own risk.

"Police registered 8,096 economic cases in 2020 and 10,598 cases in 2019 due to scammers who were mainly motivated by the desire to make quick money from unsuspecting members of the public.

Last year 2,925 victims lost more than Shs 41 billion through pyramid schemes and cybercrimes in 2019 and many more have lost money this year through gifting circles and the illegal financial advisory called BA Verve Cards.

Officials at CMA re-assured all Ugandans that the they are continuing to monitor activities in country's capital markets to ensure order, fairness and transparency.

Given the likely economic impact of Covid-19 on business enterprises and the economy, a number of people are bound to be desperate for survival owing to the spillover effects of the epidemic which include loss of jobs and reduction or loss of incomes.

The authority said that it is aware that during such challenging times, unscrupulous individuals tend to take advantage of the unsuspecting public and devise schemes to defraud them of the limited savings they have left to cater for their basic needs.

Musaali cautioned the public to be mindful of such schemes, especially during and post Covid-19 and, avoid falling prey to selfish characters whose interest is to take advantage of already distressed people.

"If you are not sure about a scheme's legitimacy, contact the CMA or check the CMA website to confirm its existence before you place any investments with them. Always seek investment advice from the CMA licensed investment advisors,"said Musaali.