Special Alert

The U. S. Department of the Treasury has discovered certain entities attempting to engage banks and others in the purchase and sale of "Limited Edition" Treasury securities. No such securities exist.

The Treasury Department has asked the FDIC and other agencies to warn Treasury securities market participants of this activity. The Treasury Department has prepared the attached statement describing the structure of the fictitious securities.

Banks offered transactions involving these securities should immediately contact Mr. Jim Kramer-Wilt of the Treasury Department's legal staff at (304) 480-5190. For more information, please contact the Bureau of the Public Debt at (202) 219-3632.

Attachment: (below)

Distribution: FDIC-Supervised Banks (Commercial and Savings)

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 (800-276-6003 or (703) 562-2200).

The Bureau of the Public Debt recently became aware of a situation in which certain foreign individuals and groups are attempting to defraud entities by offering to sell and structure transactions in non-existent United States Treasury securities. Certain entities (e.g., broker-dealers and banks) have been approached with a proposal to purchase and resell a fictitious instrument referred to as "Limited Edition" U.S. Treasury securities. As part of this scheme, these entities are being sought to act as fiduciaries for the transactions.

This is to advise that there is no such security as a "Limited Edition" Treasury security.

The bogus "Limited Edition" Treasury securities are represented as having the following features: a term of 10 years; an annual interest rate of 6%; a minimum purchase amount of $100 million; an unspecified offering amount (i.e., the securities are represented as being available for sale until "exhausted"); an initial price of 57% of the face value; and, issued in physical (paper) form. The proposal makes numerous other misrepresentations about the way marketable U.S. Treasury securities may be bought or sold and it also misrepresents the role that the Department of the Treasury plays in the original sale and issuance of Treasury securities.

If domestic financial institutions are approached by individuals offering such a transaction, they should immediately contact Mr. Jim Kramer-Wilt of the Treasury's legal staff at (304) 480-5190. If contact is made at an institution's overseas branch or affiliate or at a foreign financial institution, the appropriate local law enforcement authority should be notified.