2- LEGAL ORIGIN
The High Yield Investment Program (HYIP), also called Bank Debenture
Trading Program, etc...are investment transactions in financial
instruments; they are regulated and approved by the Fed (Federal
Reserve of the United States of America) un der the captions
"RISKLESS PRINCIPAL TRANSACTION" (number
3230.4.4 and following, the Fed monitoring manual 3000 Not Banking
Activities, Regulation), and Private Placements (number 3230.4.2 and
following, the Fed monitoring manual 3000, Non Banking Activities,
Regulation and Private Placements) and whose implementation is via
Traders who work very closely with banks among the top 50 in the
world, designated and autorhized by that institution.
The Fed, in this general described framework, use the gained
profitability to help third world projects disasters, etc...
Therefore, each program is associated with a particular Project or a
specific helping programs.
The investments programs as an activity of "riskless"
principal, takes place within the private placement market, which
"involves the placement of new issues of securities with a
limited number of sophisticated purchasers in non public offering
(...) Such securities are only offered to finantially sophisticated
institutions and individuals, not to the public".
It involves the placement of new securities values from a limited
number of sophisticated buyers by a non public offer. These values are
offered only to insitutional investors or individuals with financial
capacity, never to the general public.
5.- DESCRIPTION OF "RISKLESS PRINCIPAL" AND
"PRIVATE PLACEMENT TRANSACTIONS"
In transactions known as "riskless principal", the
operating firm, when it receives a purchase order for an applicant /
investor, it acquires the values of a third firm, by purchasing them
at "Inside Price" (Price of emission), and reselling those
securities to the applicant / investor at market price, generating
this way the corresponding gains. "Riskless principal"
operations were performed in the secondary market. The "Private
Placement" in the broadcast market, acting the operating firm as
agent in the placement of securities issued.