INSIDER TRADING
The documented pre-Sept. 11 insider trading that occurred before the attacks involved only companies hit hard by the attacks. They include United Airlines, American Airlines, Morgan Stanley, Merrill-Lynch, Axa Reinsurance, Marsh & McLennan, Munich Reinsurance, Swiss Reinsurance, and Citigroup.
In order to argue that massive and well-documented insider trading occurring in at least seven countries immediately before the attacks of Sept. 11 did not serve as a warning to intelligence agencies, then it is necessary to argue that no one was aware of the trades as they were occurring, and that intelligence and law enforcement agencies of most industrialized nations do not monitor stock trades in real time to warn of impending attacks. Both assertions are false. Both assertions would also ignore the fact that the current executive vice president of the New York Stock Exchange (NYSE) for enforcement is David Doherty, a retired CIA general counsel. And also ignored is the fact that the trading in United Airlines stock -- one of the most glaring clues -- was placed through the firm Deutschebank/Alex Brown, which was headed until 1998 by the man who is now the executive director of the CIA, A.B. "Buzzy" Krongard.
One wonders if it was a coincidence then, that Mayo Shattuck III, the head of the Alex Brown unit of Deutschebank -- which had its offices in the WTC -- suddenly resigned from a $30 million, three-year contract on Sept. 12, as reported by the New York Times and other papers.
The American exchanges that handle these trades, primarily the Chicago Board of Options Exchange (CBOE) and the NYSE, know on a daily basis what levels of put options are purchased. "Put options" are highly leveraged bets, tying up blocks of stock, that a given stock's share price will fall dramatically. To quote 60 Minutes from Sept. 19: "Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the U.S. stock options market."
It is hard to believe that they missed:
- A jump in UAL put options 90 times (not 90 percent) above normal between Sept. 6 and Sept. 10, and 285 times higher than average on the Thursday before the attack. [CBS News, Sept. 26]
- A jump in American Airlines put options 60 times (not 60 percent) above normal on the day before the attacks. [CBS News, Sept. 26]
- No similar trading occurred on any other airlines. [Bloomberg Business Report, the Institute for Counterterrorism (ICT), Herzliyya, Israel citing data from the CBOE]
- Morgan Stanley saw, between Sept. 7 and Sept.10, an increase of 27 times (not 27 percent) in the purchase of put options on its shares. [ICT Report, "Mechanics of Possible Bin-Laden Insider Trading Scam," Sept. 21, citing data from the CBOE].
- Merrill-Lynch saw a jump of more than 12 times the normal level of put options in the four trading days before the attacks. [Ibid]
These trades were certainly noticed after the attacks.
"This could very well be insider trading at the worst, most horrific, most evil use you've ever seen in your entire life... This would be one of the most extraordinary coincidences in the history of mankind if it was a coincidence," said Dylan Ratigan of Bloomberg Business News, interviewed on Good Morning Texas on Sept. 20.
"I saw put-call numbers higher than I've ever seen in 10 years of following the markets, particularly the options markets,' said John Kinnucan, principal of Broadband Research, as quoted in the San Francisco Chronicle," reported the Montreal Gazette on Sept. 19. The paper also wrote, "Agence France Presse, on Sept. 22, reported, 'And Germany's Bundesbank chief, Ernst Weltke, said on the sidelines of the meeting that a report of the investigation showed "bizarre" fiscal transactions prior to the attacks that could not have been chalked up to coincidence.
"Weltke said the transactions, 'could not have been planned and carried out without a certain knowledge,' particularly heavy trading in oil and gold futures."
ABC World News reported on Sept. 20, "Jonathan Winer, an ABC News consultant said, 'it's absolutely unprecedented to see cases of insider trading covering the entire world from Japan, to the U.S., to North America, to Europe."
How much money was involved? Andreas von Bülow, a former member of the German Parliament responsible for oversight of Germany's intelligence services estimated the worldwide amount at $15 billion, according to Tagesspiegel on Jan. 13. Other experts have estimated the amount at $12 billion. CBS News gave a conservative estimate of $100 million.
Not a single U.S. or foreign investigative agency has announced any arrests or developments in the investigation of these trades, the most telling evidence of foreknowledge of the attacks. This, in spite of the fact that former Security and Exchange Commission enforcement chief William McLucas told Bloomberg News that regulators would "certainly be able to track down every trade."
What is striking is that a National Public Radio report on Oct. 16 reported Britain's Financial Services Authority had cleared bin Laden and his henchmen of insider trading. If not bin Laden, then who else had advance knowledge?
It has been standard and established USG policy to be alert and responsive to anything even remotely resembling an attack on U.S. companies and/or the economy. The word "remote" does not apply here. The possible claim by the Bush Administration that, 'Gee, we just happened to miss this,' becomes even more implausible when considering the lengths intelligence agencies go to in order to track stock trades.
Note that the Israeli Institute for Counter-Terrorism was the first entity to release a detailed report on the insider trading. That alone is prima facie evidence of a direct relationship between the financial markets and terrorist investigations. Lies A sixth Grader Would Not Accept