What the Securities and Exchange Commission Says About Unlicensed Investments: ASJ Official Guide

The SEC’s position is clear: operating without a licence is not a technicality—it is a criminal offence under Ghanaian law. This report compiles the Commission’s official statements, legal warnings, and public advisories on unlicensed investment schemes.

Executive Summary

The Securities and Exchange Commission (SEC) of Ghana has issued unequivocal statements on unlicensed investment activities: any entity soliciting funds for investment purposes without a valid SEC licence is operating illegally, and investors who engage with such entities do so at their own risk.

Under Section 109 of the Securities Industry Act, 2016 (Act 929), no person shall operate as a market operator, broker, dealer, investment adviser, fund manager, or in any other capital market activity without a valid licence issued by the SEC . Contravention of this provision is a criminal offence with both administrative and criminal sanctions .

The SEC has repeatedly warned that schemes promising unrealistic returns, operating through vague business models, and lacking regulatory approval exhibit the hallmarks of fraudulent operations . The Commission has published specific red flags, issued public notices against unlicensed entities (including Mekanism Marketing Ltd and Fidelity Capital Investment Group), and outlined clear verification procedures for the investing public.

This ASJ report compiles the SEC’s official position on unlicensed investments, the legal framework governing capital market activities, the Commission’s enforcement actions, and practical guidance for investor protection.

Part 1: The Legal Framework — What the Law Actually Says

Section 109 of Act 929: The Licence Mandate

The cornerstone of Ghana’s capital market regulation is Section 109 of the Securities Industry Act, 2016 (Act 929). The provision states:

“A person shall not carry on business as a securities exchange, hedge fund, private equity fund, venture capital fund, nominee, credit rating agency, broker-dealer, primary dealer, investment adviser, fund manager, trustee, custodian, securities depository, clearing and settlement services, registrar, underwriter, issuing house or as any other operator required to hold a licence as the Minister by notice in the Gazette may prescribe, or pose as carrying on the business unless that person holds a valid licence issued under this Act” .

The provision also prohibits individuals from acting as representatives of such entities without a relevant representative’s licence .

What this means for investors: Any entity offering investment products or services—whether through a website, social media, WhatsApp, or in person—must be able to produce a valid SEC licence. If they cannot, their activities are illegal.

Section 206: Criminal Liability

Under Section 206 of Act 929, a person who contravenes the Act commits an offence and is liable to prescribed administrative and criminal sanctions . This means that operating an unlicensed investment scheme is not merely a regulatory violation—it is a criminal act.

The SEC has emphasised that “any person who engages in such unauthorized capital market activities is liable to administrative and criminal sanctions under the laws of Ghana” .

Section 294(1)(b) of Act 992: Public Investment Solicitations

The Companies Act, 2019 (Act 992) reinforces this position. Under Section 294(1)(b), it is unlawful to make public invitations to invest in a company’s securities without complying with statutory requirements .

This provision closes the loophole that some schemes attempt to exploit by claiming they are not “investment schemes” but rather “business opportunities” or “membership programmes.” The SEC has consistently held that the substance of the activity—not the label—determines whether a licence is required.

Part 2: The SEC’s Official Position — Stated in Public Notices

The Mekanism Marketing Ltd Warning (February 2026)

On 16 February 2026, the SEC issued a public notice against Mekanism Marketing Ltd (also known as “Mekanism”) . This notice provides the clearest articulation of the SEC’s position on unlicensed schemes.

Regulatory Status:

“The SEC states unequivocally that Mekanism Marketing Ltd is NOT licensed, authorized, or approved to operate in Ghana’s capital market. Accordingly, any investment activity promoted by this entity constitutes an unauthorized and illegal capital market activity” .

Modus Operandi identified by the SEC:

SEC’s Characterisation:

“The SEC considers these promised returns to be unrealistic, unsustainable, and bear features of a fraudulent scheme designed to lure unsuspecting members of the public” .

Legal Consequences:

“Under Section 109 of Act 929, a person shall not operate as a market operator, broker, dealer, investment adviser, fund manager, or in any other capital market activity without a valid licence issued by the SEC. Under Section 206 of Act 929, a person who contravenes the Act commits an offence and is liable to the prescribed administrative and criminal sanctions. Further, under Section 294(1)(b) of the Companies Act, 2019 (Act 992), it is unlawful to make public invitations to invest in a company’s securities without complying with statutory requirements” .

Enforcement Action:

“The SEC is collaborating with relevant law enforcement agencies to identify and take appropriate action against the people behind this suspected scheme with fraudulent features” .

The Fidelity Capital Investment Group Warning (May 2026)

In May 2026, Deputy Director-General of the SEC, Mensah Thompson, issued a public warning against Fidelity Capital Investment Group, an entity operating a scheme similar to a Ponzi scheme and promising unusually high returns through platforms such as Telegram .

Key statements from the SEC official:

“Anybody who comes to you with an investment portfolio promising 20 to 50 percent in this current economic condition is a huge red flag and you must completely flag it by not putting your money in it” .

“Again, we always tell people who are in doubt, always reach out to the SEC to verify. We have had a number of complaints of people who have invested in these platforms and the next day they go and the platform has disappeared. That is why we encourage you to go to the SEC website. All our licensees are published on our website. Verify on our website if indeed they are licensee before you put your money in” .

Specific red flag: The official noted that the entity was operating “only on online platforms and especially platforms such as Telegram,” which he described as “one reason for you to be cautious” .

Enforcement and Recovery:

“We are in huge partnership with the Cybersecurity Authority. We have also been able to make some retrievals of funds. Sometimes with the help of the telecommunication chamber, we are able to track especially the mobile numbers that are used to collect these funds and we are able to locate the people and effect their arrest” .

Clarification of identity: The SEC emphasised that Fidelity Capital is not affiliated in any way with Fidelity Bank Ghana and is a separate entity that is not licensed by the SEC .

The Menzgold Directive (2018) — A Precedent

The SEC’s landmark action against Menzgold Ghana Limited established important precedent. In September 2018, the SEC directed Menzgold to “shut down immediately the business of trading in gold collectibles with guaranteed returns to clients which constitutes, in essence, dealing in securities with neither the necessary license nor disclosures authorized by the SEC” .

Key statement from the Menzgold directive:

“The SEC hereby directs Menzgold Company Ltd to shut down immediately the business of trading in gold collectibles with guaranteed returns to clients which constitutes, in essence, dealing in securities with neither the necessary license nor disclosures authorized by the SEC. No new contracts should be created and all advertising of the investment business halted with immediate effect” .

The SEC noted that “the provision of information does not make that aspect of Menzgold’s operations any less of an illegality under Act 929 as well as a threat to unsuspecting and uninformed investors” .

Part 3: The SEC’s Characterisation of Fraudulent Schemes

The “Hallmarks” of Fraudulent Unlicensed Schemes

Based on multiple public notices, the SEC has identified consistent characteristics of fraudulent unlicensed schemes:

The Ponzi Scheme Characterisation

The SEC has been explicit in characterising the structure of these schemes:

“The regulator noted that the returns being promised were not only ‘unrealistic’ but structurally ‘unsustainable’, characteristic of classic Ponzi schemes that rely on new deposits to pay off older investors” .

“The SEC described the promised returns as unrealistic and unsustainable, and said the features of the scheme pointed to a fraudulent operation designed to lure unsuspecting members of the public” .

The “Smokescreen” Finding

A particularly significant finding in the SEC’s investigation is the determination that vague task descriptions are intentional obfuscation:

“To gain legitimacy, it said the scheme required participants to perform unspecified digital tasks. However, SEC was quick to dismiss these activities as a smokescreen for a fraudulent operation” .

This finding establishes that the inability of a scheme to clearly explain its revenue model is not a sign of complexity—it is a sign of fraud.

Part 4: The Risks of Unlicensed Investments — The SEC’s Warnings

Risk 1: Total Loss of Capital

The SEC has warned that investing with unlicensed entities exposes investors to significant financial risk:

“By operating without a valid licence, Mekanism exposes its ‘investors’ to total loss with no legal recourse through the regulator’s protection funds” .

Risk 2: No Legal Protection

When investors commit funds to unlicensed schemes, they forfeit the protections that the regulatory framework provides:

“Such schemes pose serious financial risks and undermined the integrity of the capital market” .

Risk 3: Platform Disappearance

Deputy Director-General Mensah Thompson described a common pattern:

“We have had a number of complaints of people who have invested in these platforms and the next day they go and the platform has disappeared” .

Risk 4: Difficulty of Recovery

While the SEC collaborates with law enforcement to recover funds, recovery is not guaranteed:

“We are doing a lot but there is very little that we can do and so that is why we are always entreat the public to be more cautious” .

Part 5: The SEC’s Verification Protocol — How to Protect Yourself

The Official Verification Channels

The SEC has established clear channels for investors to verify licensing status:

The Verification Process

The SEC advises the public to:

1. “Verify the licensing status of any individual or entity offering investment products or services before committing funds” 

2. “Consult the list of SEC regulated entities on our website” 

3. “Call our toll free line to confirm the licensing status of any firm that offers them products or services relating to the Capital Market” 

The SEC has emphasised that verification is not optional—it is an essential step in investor protection.

The Regulatory Sandbox Note

The SEC has established a Regulatory Sandbox for innovative products, but this is a controlled testing environment under SEC oversight. Unlicensed schemes operating outside this framework have no such protection.

Part 6: The Consequences for Offenders — Legal Sanctions

Administrative Penalties

Offenders face administrative sanctions, including significant fines . The SEC has the authority to impose these penalties without court order.

Criminal Prosecution

Under Section 206 of Act 929, contravention of the Act is a criminal offence. The SEC has stated that offenders “face both criminal prosecution and administrative penalties” .

Law Enforcement Collaboration

The SEC is “collaborating with relevant law enforcement agencies to identify and take appropriate action against the people behind this suspected scheme” . This collaboration includes:

• Cybersecurity Authority for digital investigations 

• Telecommunication Chamber for tracking mobile numbers used for fund collection 

• Law enforcement agencies for arrests and prosecution 

Asset Recovery

The SEC has demonstrated the ability to recover funds:

“We have also been able to make some retrievals of funds. Sometimes with the help of the telecommunication chamber, we are able to track especially the mobile numbers that are used to collect these funds and we are able to locate the people and effect their arrest” .

Part 7: The Public Advisory — The SEC’s Ongoing Warnings

The Core Message

The SEC’s consistent message to the investing public is:

“The SEC urges the General Public to verify the licensing status of any individual or entity offering investment products or services before committing funds” .

The Risk Acknowledgement

The SEC has been transparent about the limitations of enforcement:

“We are doing a lot but there is very little that we can do and so that is why we are always entreat the public to be more cautious” .

The Commitment to Investor Protection

The SEC has stated:

“The SEC reiterates its commitment to protecting investors and maintaining the integrity of Ghana’s capital market” .

Conclusion: The SEC’s Position Is Clear

The Securities and Exchange Commission has been unequivocal in its position on unlicensed investments:

1. Licensing is mandatory — No entity may operate capital market activities without a valid SEC licence under Section 109 of Act 929 .

2. Unlicensed operation is criminal — Contravention carries administrative and criminal sanctions under Section 206 of Act 929 .

3. Fraudulent schemes have identifiable characteristics — Unrealistic returns, vague business models, and online-only presence are hallmarks of fraud .

4. Verification is the investor’s first line of defence — The SEC provides free verification via toll-free line 0800 100065 .

5. Enforcement is active — The SEC collaborates with law enforcement to track, arrest, and prosecute offenders .

The SEC’s warnings are not theoretical—they are based on documented investigations of schemes that have caused significant financial losses. The Mekanism Marketing Ltd notice, the Fidelity Capital warning, and the Menzgold directive all demonstrate the Commission’s active role in identifying and publicising fraudulent operations.

For investors, the message is clear: verify before you trust, trust before you invest. The SEC has provided the tools—toll-free line 0800 100065, website sec.gov.gh, email [email protected]. The cost of verification is zero. The cost of not verifying has been, for thousands of Ghanaians, everything.

Quick Reference: The SEC’s Position on Unlicensed Investments

Last Updated on June 11, 2026 by Samuel Kwame Boadu

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

accrastreetjournal.com/