[Max Taxable]

Forum Manager> Choose forum or subforum to edit, click "go."

Scroll down to "Access Options" and see:

Forum Password (Optional: This acts in addition to any other permissions set for this forum)

Apply This Password to Child Forums (Only if changed)
Yes No

Can Have Password (Setting this to no will prevent a password from being inherited and from being set by moderators)
(Note: You may still set a password manually)

Fill in your password, set child forums the way you want it, and select "No" for "can have password" to keep your Moderators from changing it.

You're done. No one without the password can access this forum or subforum now. This also works for categories.

The problem with any password protected area, is people giving out the password. This is true whether the password is done via the software as I showed you, or if it's done with a directory in the server.