FBI Honolulu
Special Agent Tom Simon
(808) 566-4300
January 5, 2015

FBI Warns Public About Platform Trading Investment Scams

Paul D. Delacourt, Special Agent in Charge of the Honolulu Office of the Federal Bureau of Investigation (FBI), is warning the public about fraudulent activity commonly referred to as Platform Trading, Private Platform Programs (PPPs), Prime Bank Trading, or Medium-Term Note Trading Programs. In these schemes, perpetrators falsely represent their ability to offer above-average market returns with below-market risk through the trading of bank instruments. Offering such programs, or claiming to have connections to such programs, violates numerous federal criminal laws.

The FBI has participated in numerous investigations of persons promoting Platform Trading investment schemes and noted several common characteristics, including:

  • Claims that investor funds can be placed in a bank account and then used, without risk, to trade bank debentures or other financial instruments;
  • Claims that invested funds can be used to lease or rent U.S. Treasury Obligations and then use these same leased securities as collateral for further trading programs;
  • Claims that trading Medium Term Notes (MTNs), Prime Bank Notes, or any other bank instruments, on a riskless basis, will yield above market returns;
  • Claims that Letters of Credit or Standby Letters of Credit can be discounted or traded for profits;
  • Claims that certain high-yield foreign trading programs are sanctioned or supported by the Federal Reserve, International Monetary Fund, International Chamber of Commerce, or other U.S. or international agencies;
  • Claims about special connections to the Federal Reserve or some other internationally renowned organization such as the United Nations, the IMF or the World Bank;
  • Claims of ties to benevolent, humanitarian, or charitable projects;
  • The need for extreme secrecy and nondisclosure agreements;
  • Claims that banking and regulatory officials will deny knowledge of such instruments;
  • Claims that these investment opportunities are by invitation only, available to only a handful of special customers, and historically reserved for the wealthy elite;
  • Claims that the financial instruments are too technical or complex for non-experts to understand.

In general, investment programs that purport to offer an introduction to secret investment markets, which offer above-market rates of return with below-market rates of risk for privileged customers with special access, are fraudulent. There are no secret markets in Europe or in North America in which banks trade securities. Any representations to the contrary are fraudulent.

Some phrases are commonly seen in documents presented by fraudsters in the course of Platform trading schemes. If any of these phrases appear in documentation, the investment opportunity should be treated with suspicion. These “red-flags of investment fraud” include:

  • Non-circumvention, non-disclosure
  • Good, clean, clear, and of non-criminal origin
  • Blocked Funds Investment Program
  • Private Placement Program
  • Prime Bank Trading Program
  • Medium-Term, Mid-Term, or Seasoned Note Trading Program or Platform
  • Federal Reserve approved
  • Roll Program
  • Irrevocable Pay Orders
  • Unconditional Bank Guarantee
  • Prime Bank Notes, Guarantees, Letters of Credit, Standby Letters of Credit
  • Fresh-cut paper
  • Top 100, 50, 25, 10, etc. European/World Banks
  • Trading Platform or Platform Trading Program
  • Insurance Wrap protecting investment value
  • Paymaster who handles funds disbursement
  • Exit-buyer

As noted above, the marketing of fraudulent investment schemes violates many federal and state criminal laws. Anyone with information regarding persons offering these Platform Trading investments should contact their local FBI field office.