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Invest Wisely: CMA’s Warning on Capital Market Scams

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invest wisely cmas warning on capital market scams
invest wisely cmas warning on capital market scams




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In Kampala, Uganda, the Capital Markets Authority (CMA) is taking strong measures to combat fraudulent activities in the capital markets, with a particular focus on Collective Investment Scheme products. This initiative is at the forefront of the activities planned for World Investor Week 2023, scheduled to run until October 8.

The CMA advises Ugandans who are looking to invest their money to conduct thorough research before investing in any product or service. They also recommend investing with licensed and regulated firms. Dickson Ssembuya, CMA’s Director of Research and Market Development, cautions potential investors to be cautious of unsolicited investment offers, diversify their investment portfolios to reduce risk, and regularly monitor their investments.






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Nonetheless, Ssembuya emphasizes that Collective Investment Schemes remain a wise investment choice due to several benefits, such as lower risk, the opportunity to invest in substantial ventures like multiple bonds with minimal savings, and the advantage of favorable tax policies that exempt returns from taxation.

World Investor Week is a global campaign supported by the International Organization of Securities Commissions (IOSCO) aimed at promoting investor education and protection. It also highlights the initiatives of securities regulators in crucial areas related to capital markets.



In the context of this year’s seventh annual World Investor Week (WIW), CMA has observed a rise in incidents involving fraudulent operators and unlicensed financial schemes across Uganda, taking various forms. These include individuals or firms posing as investment advisors and fund managers, as well as pyramid schemes operating both physically and online. These schemes target unsuspecting members of the public, promising exceptional investment returns in exchange for cash deposits.

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The CMA has taken action on numerous complaints and issued warnings against seeking investment advice or engaging with unlicensed individuals or entities. Recently, CMA raised concerns about a suspicious investment model involving three companies – Capital Chicken Ltd, The Mall Fund Ltd, and Veta Plan Chicken – all operating in Kampala. These companies were accused of conducting activities resembling capital markets without proper licensing. They claimed to be registered as farming ventures with the URSB, not financial companies dealing in stocks. However, suspicion arose due to their operational method, where investors deposited money with the firms and waited for five months to receive returns ranging from 40% to 60% based on their investments.



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It is alleged that the returns to investors came from new investors joining the scheme, rather than profits generated by the chicken farming operations. Regulators consider this a Ponzi scheme. Ssembuya states that the CMA has organized online public lectures to educate Ugandans on protecting themselves against scams.