Is There Really a Fed Program for Private Placement Programs?

The Federal Reserve Bank

• The Federal Reserve Bank (the Fed) does not offer private placement programs to the public, small businesses or high net worth individuals. Nor does it offer programs through agents or brokers. However, it plays a significant role in PPPs.
  
  

Federal Reserve Bank Regulations

• Private placement programs need federal bank authorization. In general, the programs are used to raise money for humanitarian causes through foundations. A trader should register with the Federal Reserve Bank as ultimately no trade can go forward without the Federal Reserve Bank's authorization following its due diligence. The Fed checks the funds involved to ensure they are not connected to criminal activity.
  
  

Private Placement Scams

• PPPs are not required to register with the Securities and Exchange Commission (SEC), as they were originally intended to help small businesses or groups of investors raise money without going public. However, this leaves the industry sector open to scams. The Federal Reserve Bank is frequently mentioned in these scams as the holder of securities in various forms, such as bonds and bank guarantees, and that the bank is offering an "invitation only" private placement program. Details of scams mentioning the Federal Reserve Bank are on its website.