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Home » PRIVATE PLACEMENT

Top 10 “Red Flags” for Private Placement Programs

private-placement-investors-red-flag11With the recent increase in private placement, project funding, and bank instrument related fraud, it is now more crucial than ever to identify suspicious actions.  Though this may seem like common sense, the problem is, until our blog was created there was no reliable information source which defined truth and dispelled myth.  As we have done with all of our articles on private placement programs, this list of common “red flags” will provide unique insight and invaluable tools to help you on your path to success.

By staying attentive to common warning signs, such as the ones we will discuss below, you can approach each private placement transaction with diligence and realism.  Though many of these tips may seem simple at first, applying them correctly can be the difference between a life of wealth, and a trip to the “school of hard knocks”. Take a look below, these tips can save you millions!

Top 10 Red Flags for Private Placement Programs

1. Private Placement Programs with VERY High Returns:  If you hear about a private placement investment yielding over 50% per week, it is UNLIKELY to fulfill its promises. Unless you have over 100M, and are extremely lucky, you are barking up the wrong tree. Please review our article on private placement yields for more information.

2. Programs which “Piggy back” or Pool Investors to Meet a Minimum:  Pooling investors for private placement programs is risky, and unfortunately, it is quite frequent in today’s private placement world. The problem is, if you have a large number of investors in a private placement, there is a good chance that one will “cry wolf” because they feel uncomfortable due to the lack of transparency. Once that happens, which it usually does, the SEC, FBI, etc. will begin an investigation that could last years, freezing everyone’s assets.

3. “Ping” Programs, or “Administrative Holds”Private placement “ping programs”, or programs that require administrative holds, are everywhere but rarely ever work. The problem is simple: there is no collateral on hand to stimulate the line of credit for the private placement trader. Many inexperienced private placement brokers push these deals, NEVER succeeding despite years of efforts.

4.  Claims of “No Risk” for the Investor:  In any alternative investment, there is always risk. This is especially true for private investments, due to their unregulated nature and high risk strategies.  Despite what many brokers may say, private placement programs DO carry risk.  To be successful in any private placement, you must always collateralize your funds, and assign them to the trader. If the trader defaults on the line of credit, the funds of the investor can be seized.

5.  No One Vouches for their Success with the Trader:  If you are investing in a private placement program, ALWAYS be sure to speak with someone who has been successful with the trader.  Investors who choose to move forward with a private placement program which hasn’t been vouched for are taking a huge risk. To state the obvious, acting as a “guinea pig” is not the best decision when seeking private placement.

6.  The “Program Manager” Slips Up:  If you ask the same questions twice, and the program manager changes their answers even slightly, you should dig deeper to look for more inconsistencies.  Think of your conversation with the representative and trader of the private placement program as a psychological analysis.  Every response, tone, and answer should be assessed to ensure you are comfortable before moving forward.

7.  Traders that Accept Leased Bank Instruments:  If a private placement trader accepts a leased bank instrument, move on before you waste your time. No REAL private placement program will accept funds which you do not have full control over. Though leased bank instruments have become extremely popular, in all reality, you have a one in a million shot of being successful.  For more information, visit our article on the FACTS of bank instrument leasing.

8.  Private Placement Programs that Accept Hard Assets:  If you have hard assets, and are looking to get into a private placement program, then please be safe. Unfortunately, there is a liquidity crisis worldwide, and it is very tough to get banks to loan against illiquid assets. In all honesty, your best bet is to sell the asset, and invest a portion of the earnings into a private placement program.

9.  “Bullet Programs”, or Short-term “Leveraged” Programs:  Short term or “bullet programs” typically promise extremely high yields, and very rarely work. Most real private placements last 40 weeks, due to the contractual agreements between the trader and their exit buyers who purchase the medium term notes (MTN)/bank guarantees (BG). Usually, short term programs claim to “leverage” the funds, and by doing so, “create immensely higher returns”.

10.  The Old Fashioned Bait and Switch Technique:  If a private placement program seems too good to be true, look out for the infamous “bait and switch” technique.  In many cases, private placement brokers will paint a rosy picture of the process, and then switch the terms once the investors is so excited that they are ready to do whatever they need to get the “high returns”.  This is very common, so investors must ALWAYS be aware of this unfortunate scenario when verifying the details of any program with the trader.

Though there are plenty of actions which can be considered “red flags” in private placement, we have listed the most common scenarios above.  If you remember nothing else from this article, a good rule of thumb is: if it sounds too complicated, or too good to be true, it usually is.

As with any other material we publish, reading can teach you a lot, but applying the knowledge and tips we provide is far more important. We didn’t write this article for fun, look for any sign of inconsistency, and act if needed before it’s too late. Remember, common sense is your friend, and when you choose to follow hope over rational thought, the oasis will always disappear when you arrive.

InsideTrade LLC Staff
Phone: (949) 444-2111

44 Comments »

  • You could systematically contrive to commit in hard assests for a firm fiscal retreat — 20 Places to… Business said:

    [...] Top 10 Red Flags for Private Placement Programs | InsideTrade LLC [...]

  • Mr. Maxwell Esq said:

    A real provider our group worked with and closed a transaction with 100% transparency is out of Switzerland.. They where honest and open with us throughout the entire process.. But they are very selective about who they will work with. there name is Secured Equity Management or http://www.semglobal.eu

  • realestatexpert said:

    Wow. Nice job there fellas

  • What is a Stand by Letter of Credit (SBLC) ? | InsideTrade LLC said:

    [...] how to spot other”warning signs” in PPP, take a minute and read the article “Top 10 Red Flags for Private Placement“. It will help you identify real opportunities, while providing key tips to keep you sharp in [...]

  • Mr Francis said:

    Hello Mr Maxwell. I am exploring PPPs. Please can you tell me more about your experience with SEM. I am involved with large scale gold bullion transactions and we are considering PPPs ourselves, rather than bullion sales. Thank you. RSVP ASAP

  • Hope, the Enemy of Private Placement Brokers | InsideTrade LLC said:

    [...] to understand about life, if there’s one place you DON’T want to apply it, it’s the private placement [...]

  • fed said:

    http://www.ustreas.gov click on fraud

  • Private Placement Program Tips | InsideTrade LLC said:

    [...] at what you have or DON’T have, and keep the money and celebration for after the transaction. Private placement program deals are never closed by those who are greedy, or those who put the cart before the [...]

  • Tom Walker said:

    Very good article!

    I would be interested in feedback:

    In conversations with two people who have been directly involved with successful PPPs at principal levels, I have heard that 1) administrative holds and holds not in favor of the trader are possible in rare instances. Some traders have been in business with a given bank for decades and can do things the normal mortal cannot, etc.

    And;

    2) From what I have been told, the idea of risk in a proper program-based PPP is usually real but VERY low. In a buy-sell instrument transaction, for instance, the exposure to 'risk' lasts only so long as each transaction is open. Any failure would still be secured by actual possession of an instrument.

    I have to bet the real risk is getting 'in bed' with the wrong trader and the wrong program. Feedback?

  • ustreas said:

    [...] Re: New plan could expedite short sales, from San Francisco Chronicle …Top 10 Red Flags for Private Placement Programs | InsideTrade LLCInvesting in a private placement program? Well, read these common red flags before choosing your [...]

  • William Geist said:

    I have a Private Investment opportunity requiring $1 million in cash. It is not a PPP and is completely transparent and located here in the U.S. It is with a 40 year old not-for-profit insurance company. For more details email me at aternumcapital@yahoo.com. Thanks.

  • Lady Di said:

    Mr. Maxwell, ditto here. We are seeking excellent referral providers to handle a PPP process. Can you provide some more information on semglobal?

  • mei said:

    Hi ,
    How do you issue an administrative holds and holds not in favor of the trader ?
    You are not referring to MT760 right?
    What should I look out for in a good trader? like what to ask???
    Thanks

  • Consultant said:

    If, whoever reads this, is a REAL Platform truly DIRECT connection or a REAL Client / Mandate (not part of a daisy chain of brokers) and you wish to speak with a REAL person, who is TRULY connected to other REAL Cash Clients, as well as to REAL Trade / MTN / or Energy Related Opportunities, (that my grueling process of going through 10,000 "BS" Brokers finally brought my way) please write me at consultantmail@aol.com – but PLEASE do yourself an enormous favor if you are criminally-intent: don't come my way, for you will be turned in to the FBI, and I will turn State's or Federal Evidence against you at the drop of a hat ! This is how strongly I feel about the hell that this consortium of lying brokers, lying clients, and imaginary platforms has put me through over the past several years, needlessly !

  • Consultant said:

    BECAUSE it's a business of "BY INVITATION ONLY" platforms are not allowed to advertise, promote, nor solicit clients; hence a wide open invitation for unsavory characters to 'MAKE UP RULES" as they go along; collecting up- front-fees, and engaging in a massive campaign of misinformation.

  • Consultant said:

    I understand that the Fed, IMF, Swiss 2505 -Sub C Rules, ICC Rules, and every overseeing Tom, Dick & Harry, for some UNGODLY reason created an envirnoment of "By Invitation Only" and by so doing created an arena for the practice of every imaginable and beyond evil vice for thousands of "BROKERS" who "THINK" that they have connections to REAL platforms / clients; and some of these unsavory intermediaries have created sufficient damage for all of the Private Placement Platforms to be forced to shut down in the United States, relegating us to third world country type of platforms and if we think the fraud was rampant hitherto, God help us now – for as I also understand it from those who claim to be reliable sources; the world is presently missing $32 TRILLION Dollars of misappropriated funds from bad trades, and mostly via the Euroclear Screen To Screen transaction (gone wrong); that as I also understand is now illegal, (as of four months ago) !

  • Lee Anthony said:

    So what is in it for these people who operate this 'Ping' programme?

  • Ms. Keima said:

    Please contact me at kssinclair5@gmail.com We have reliable proven PPP Trade Program available. Procedures and details are available. God Bless always~

  • Mr. A said:

    Mr. Maxwell,
    The link you have provided does not work can you please email me the link ron.andrews@msn.com Thank you

  • Commodity Training with The Joker Brokers said:

    @ Consultant. It is not the Platforms that cannot advertise. Where the programs take place is in the transacting bank and the BANK cannot advertise nor solicit for any type of program. Even if the client had the funds in their bank. Platforms do exist, but the do not exist where the fractional reserve banking unique element is working for the client or at the institution (bank) where the returns are generated.

  • joseph hafez said:

    Hi my nam is joseph hafez in calfornia,appreciate if yu send me a like for this pp in switzerland, i tried to do the like,not good lik,, or e mail will be better.thanks my e mail is:josephh617@yahoo.com

  • yaj said:

    Dear Group. Hope all is well.
    If you are an investor or have a client that is looking to invest and would like to know more about Private Placement opportunity and would like to take part, please contact me on the following details.I have a Tier 1 Fed Platform in place, for small entry level investors from 1m-10m. Someone looking to fund a project, this would be a great way to achieve.
    ys.associatesltd@gmail.com. Only genuine interested parties only. Thank you

  • Sarwar Retiwalla said:

    Fresh FD's required of 100 crore and over from any Nationalised Bank in India…Returns 100% + 25% + Mediators Commission…Please contact Sarwar Retiwalla on 09892486786…Mediators wit a huge chain not welcome…Direct Parties or Mediators directly in touch with the Account Holders Welcomed…

  • elle said:

    PPP for cash investors only 100M must be able with an admin hold and if you don't know why that is an issue. cash must be yours not your brothers mothers who got it from your uncle before he dead last night. I am direct to the no brokers, please contact me at tradecmo@live.com must be able to put your bank officer on the phone to confirm funds, in the same bank the trade will take place. must be a top 25 bank.

  • Steve said:

    Mr. Maxwell, is this company Secured Equity Management, LLC ?? Yes this link you provide doesn't go anywhere, can you shed some light on this for me ? I'd appreciate it. Also I can be reached through skype @ sampsonpro.
    Do you have a skype account ?

    Sincerely
    Steve Sampson.

  • Mike Reid said:

    Are you able to locate amoun your clients support for a GOOD new global effect humanitarian project. When factors are considered there is far to much servitude to the needs of the belly for energy to maintain body heat to run systems by humanity.

    This rapacious ingrained survival mechanism when mutltiplied by the current and future generations is now consuming OUR PLANET'S resources at very fast rate. It is now clear from the rate of disaster now almost daily we are changing support systems planet wide and not for the better.

    It is good time then to change the way we go about doing certain important matters.

    When all factors are considered it is only our collective and poor capability and systems we currently use for the transportation of goods, people etc from place to place.

    This alone is the root cause. We have a new company registered to undertake our humanitarian project to build over the next few months the first (90ft Dia) 100kg vortex generation solar powered electrically driven disc aircraft constructed of new lightweight materials that uses either helium or hydrogen for lift.

    Craft fuselage is carbon fibre with patented ring construction overlaid with gas proof fireproof supertough materials. Craft uses dual spinning single mass rotor located within craft at cardinal postions with larger rotor at C/G to cancel precession of the disc when in flight while also allowing full yaw and pitch control from within via the central spinning mass. T

    his for cancelation of precession forces acting on the disc when in flight. All other flying craft use external appendages.

    The point being we now have a low cost strong lightweight disc very safe aircraft able to lift heavy loads and transport them anywhere without emissions.

    It my fellow friend and fellow human brother would help greatly when made to large size to reduce mans footprint on the planet, by making the transportation of not only himself from place to place but also allow for better distribution of food and trade resources.

    Will you in the name of YHWH and YESHUA help start a new eon for mankind and help him survive his mistakes.

  • bhattdhaval said:

    If any one who have list of success in ppp program against SBLC or B.G then provide me why all market is full of wrong programs and commitments

  • Pupil said:

    Greetings Mr Francis, can you please advise me if you got any feedback from Mr Maxwell and whether you have in fact successfully concluded a PPP?
    Please contact me Pupil, email at pupilex1970@gmail.com

  • Pupil said:

    Greetings Mr Sampson, did you have any success? Sincerely Pupil. email: pupilex1970@gmail.com

  • Bill Newell said:

    Hi,
    I am invoved in a private placement trade at the present time. We did finally cmplete a trade, but we had funds stolen from us prior to this one. We ahve been told now that although the trade was completed, after the paymaster dispersed the funds, our bank wire was stopped by the Federal Reserve?? It has been 7 months now…and who knows what will happen.
    All I know is that this field of PPT is rampant with thieves.
    I also know that there are honest traders>(Trading Banks that have been trading for years)
    I do think its very difficult to find out abut the honest ones. I do know a "platform manager" in BH Ca.
    I woudl be interested in knowing any honest and reliable trading bank, or banks. (Traders too)

  • LISA THOMAS said:

    Hello Bill,
    sorry that this happened to you.
    It looks strange to me that the bank wire was stopped. Who is the paymaster ?
    May be it is the old trick from non performing partiese who tell that they have got the order by somebody not to pay out.
    Did you ask for documents to verify what you have been told.
    I am sure that there are lot of "thieves" who try to catch other peoples money. Always be very careful and think logic and do not believe all what people tell you, try to verify some of the information you got.
    You can contact me at contact-lisa-thomas@yopmail.com
    Best regards
    Lisa

  • Todd Allen said:

    This is one to stay way from:
    Jefferson Hu Park
    Field/Research Manager

    Known e-mail ID's:
    softoil.incorporated@gmail.com
    oceanpearlrealtors@live.com
    zymohammed@live.com

    Says he works with Saudi Royalty for joint ventures. Gave me an address in Saudi for an "investor".
    The address was checked by an associate in Saudi. It did not exist.

    His IP's were all over the globe with the main one from, of all places, Nigeria! Whata surprise

    Goes by the name of Midwest Trading Company, LLC.

    He is bogus.

  • tommie said:

    Mr.Todd,
    I am actually received an offered from this scummer,to be my jv partner,as a capital funder,at first,it's look real,however,after doing some research,all I have to say,I got scummed…

  • Tommie said:

    Actually..beware of a new scummed using zymohammed@live.com

  • Nik Mohd Mizran said:
  • Nik Mohd Mizran said:

    yes..he used by the name of zayid bin mohammed, and his wife name,hajjia fatima mohammed,they used an investment consultant,name dave hewitt,from uk..

  • Todd Allen said:

    The name of this so called Saudi Royal to whom this jerk referred was misspelled as well!

    That was the 1st tipoff it was bogus.

    Indeed stay far away from this scammer.

    There are many of them, and plenty fall for them. It is most unfortunate.

    Anyone who asks for upfront fees or for funds to be sent by Western Union is a fraud.

  • Todd Allen said:

    Another to watch is a Luc Mengue of Belgium.

    He professes to be an accountant.

    His address (unverified) is Chaussée de la Hulpe 184-1170-Brussels-Belgium

    He has a great way to obtain business funding! Oh yea!

    He will send a bogus two page agreement that does not relate to the project for which you require funding, he does not sign it but types in his name, and then after it is sent to him to bind him to the task he will then ask for a $1,000.00 up front fee to be promptly sent by Western Union.

    Oh sure.

    He claims the fee is to cover his expenses, but by his agreement he has agreed to work on a 5% commission basis.

    Suggestion is to stay away from him.

  • Todd Allen said:

    Another note of caution to those sourcing money. Be attentive and don't fall for schemes.

    If those with whom you speak upfront talk about diligence fees and upfront costs without even discussing your project or understanding it, dismiss them regardless of what they try to tell you.

    Credible intermediary money finders should first understand what you are doing and then determine if they can help before anyone talks about money.

    The sharks know folks want funding and so do they but they want it now and don't care about you.

    Some of these scammers will even tell you that the greater amounts you pay in upfront diligence fees will convince lenders you are credible and substantial! Now that's a joke. If you were so substantial why would you be sourcing investment capital!

    In most cases this money goes into their pockets, and you will never again hear from them.

    Be alert and be selective.

    Look at the signs

  • Todd Allen said:

    Another comment about Stand By Letters of Credit (SBLC)

    Bear in mind that this is a very, very expensive means of finding credit.
    One who uses this is "borrowing" another's credit standing.

    This does not come cheap, and it may not produce the desired results. Everyone involved in the process is looking to make money, and who pays for that?

    Also, a lending institution who would rely upon another's credit (SBLC) will ask a ton of questions, and, most likely, will have its own very high diligence costs.

    This is referred to as a third party guaranty situation. When a third party is making the guaranty for the debt of another the requested lending party relying upon this guaranty has to be assured that the guarantying party is solid.

    This may sometimes require bonding and insurance.

    So, if you are following what I am saying here you can see that the one looking to get funding will have spent a ton of money in advance just to setup this arrangement!

    Be very careful, ask a lot of questions, and ask for a complete breakdown of expenses and costs before you make a commitment.

  • Tom said:

    Love to talk to a real broker like u surcorplc@gmail.com

  • Todd Allen said:

    I had earlier mention the following with the caveat to stay away.

    Jefferson Hu Park
    Field/Research Manager

    He's back! Watch out. He is now-

    Kennocha EMPERATRIZ.
    Field/Research Manager.

    e-mail ID: investmentsstrategists@gmail.com

    Same routine as before with the same following opening statement:
    "We have a solid network to get Investment buyers.We also have Private Investors mostly from the Gulf Countries who are looking up investing abroad on properties."

    Stay far away folks.

    I checked all the IP's from the e-mail header. They are all blocked! The only verifyable IP was that of google!

    The bogus ones never stop.

  • mike said:

    I have a 30 Day Bullet secure opportunity $1 million and up in cash. U.S. clients only this is not a PPP and is completely transparent and located here in the U.S. client can stay in up to 6 months. Client funds remain in your own management account your funds are not touched or moved in any way! Client can use their own escrow to get payed. Funding/ payout will typically take place within 30 days.

    Get with me today at:
    Jak.projects2@gmail.com

  • mike said:

    I have a 30 Day Bullet secure opportunity $1 million and up in cash. U.S. clients only this is not a PPP and is completely transparent and located here in the U.S. client can stay in up to 6 months. Client funds remain in your own management account with a Fortune 500 company with assets under management are approximately $390 billion your funds are not touched or moved in any way! Client can use their own escrow to get payed. Funding/ payout will typically take place within 30 days.

    Get with me today at:
    Mike Milam
    Jak.projects2@gmail.com

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