Our intention is to help Users better understand the meaning and significance of various financial terms, processes and transactions that appear with all-too-frequent regularity on the Forum Board.

Release 71: Understanding Private Placement Programs - Working With "Blocked Funds"

S.W.A.T. officers faced with a life-threatening hostage-rescue situation are trained to execute a tactical assault - and to implement the operation with military precision. Firstly, thermal and sound-sensing equipment is deployed around the building to "map" the location of the subjects inside. On the Team Leader's count, officers execute a simultaneous dynamic entry through all the entrance points, after taking out the doors with C-4 explosive charges.

As the doors are collapsed, "flash-bang" grenades are hurled inside to render occupants temporarily blind and deaf. Officers then pour inside in corner formation, swinging weapons in a side-by-side sweep.

Here's a tip: S.W.A.T. officers know that any deadly threat will likely come from above or from behind. Officers are, therefore, trained to "go high-go low" in a coordinated maneuver, with flanking officers responsible for "sweeping high" for snipers - while leaving it to the second entry team to cover their backs.

In our business, thankfully, we are not required to storm any criminal strongholds - but, like L.A.'s elite S.W.A.T. team, we, too, are engaged in a search operation: a search for qualified clients. And, while, granted, our activities are not life-threatening, they can be career-making - and we are required to put our reputations on the line.

Take, for example, working with "blocked funds". Everyone accepts, surely, that in order for a client to participate in a trading opportunity his funds must be free of liens, charges or encumbrances of any kind. The flip side of that, of course, is that the client's funds must be immediately available and freely transferable upon the client's sole instructions.

Nothing out of the ordinary there; we are simply stating the obvious: the client's funds must be "investable" - that's just basic common sense! That being the case, though, it should come as no surprise to anyone that "blocked funds" - i.e. funds already held by the bank under blocking restrictions and, hence, not freely transferable - are not tradeable.

That's right, dear readers, blocked funds, to put it indelicately, "they ain't worth spit!"

Now listen carefully -

The stipulation that the client be able to transfer his funds does not mean that the client will necessarily be called upon to move his money - that will depend, ultimately, on the procedural requirements of the transaction under consideration. The Trader may, indeed, permit the client to block his funds in the client's home bank (typically in favor of the Trader) - but that's an entirely different matter from a client attempting to place into trading funds that have already been blocked (which the client simply cannot do).

Here's the bottom line: No one in this industry can work with restricted funds. If the client's funds are already "blocked" and, therefore, not immediately available and freely transferable, the client will not be able to participate in a private opportunity. Not today. Not tomorrow. Not in a thousand years.

Robert
lawscape@gmail.com

I work with a very senior, high-ranking and credentialed Trader in Europe who is one of the largest commitment holders in the world. The Trader was formerly in government service where he held a highly sensitive position in a prominent U.S. federal agency for a number of years. Our trading group has outstanding capabilities, with its own transacting facilities in most of the major banks.

We also have an established relationship with two major Providers who are able to supply medium term notes (MTN's) - fresh cut, slightly seasoned and seasoned. Both Providers are extremely reliable sources for bank instruments and have a wealth of experience; they conduct the business very professionally and are currently tranching for other clients.

We offer business colleagues and friends a monthly "newsletter" setting out information and updates concerning our private placement opportunities and MTN purchase contracts. If you wish to receive our newsletter, just send us your email address and tell us a little about yourself - and we would be pleased to add you to our "mailing list".

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