Secondary Market:

This is a catch-all term for the sales of any used assets, whether it be used cars, collectibles, farm equipment. mortgages, banker's acceptances, TREASURIES, CERTIFICATES OF DEPOSIT, PROMISSORY NOTES, mortgage-backed (loan-backed) securities, etc.  

For example, a bank holding SEASONED mortgages, i.e. mortgages on which the payments have a good record, can sell a block of these qualified mortgages to another finance company.  The selling bank collects the full amount of the mortgage plus a portion of the interest from the purchaser who then holds the mortgages until maturity or resells them for a profit. The purchaser has bought the mortgages "at discount", which means an amount less than the total amount due at maturity was paid.  The profit is the amount of interest collected from the borrower (homeowner) less overhead for handling the loans.  This can be done with any interest-bearing instrument.

The Scam:

Swindlers involved in HIGH-YIELD INVESTMENT PROGRAM scams often refer to the Secondary Market as pension funds, brokerage houses, Trusts, and insurance companies that purchase FRESH CUT SECURITIES in bulk once they have been SEASONED.  The swindler tells a potential investor that enormous profits can be made by purchasing these fresh cut securities and selling them the next day in the Secondary Market.

The con artist tells his mark that "seasoned" means that the Secondary Market cannot purchase securities directly from the issuer.  The con artist must use the mark's money to create the securities or purchase the securities, known in ScamSpeak^™ as a FUNDS  FIRST transaction.  Once this has been accomplished, the securities are considered a safe investment by the Secondary Market.

This is complete hogwash and bears absolutely no resemblance to actual issuance and trade of securities.