"Terrorist-Insider-Trading?" The SEC's Pre-September 11, 2001 Trading Review.

[Make7]

 

Document Friday: "Terrorist-Insider-Trading?" The SEC's Pre-September 11, 2001 Trading Review.

April 30, 2010

Who used advance knowledge of the Nine Eleven attacks to bet against the markets and cash in? No one, according to this 2002 Securities and Exchange Commission investigation entitled "Pre-September 11, 2001 Trading Review," which was recently released to the National Security Archive under the Freedom of Information Act. To reach its conclusion, the investigation analyzed 9.5 million securities transactions including securities and derivatives products of 103 companies in six industry groups that traded in seven different markets, as well as other "broad and narrow indices."

   <-snip->

The SEC review began on 12 September 2001 and covered the period from 20 August 2001 to 11 September 2001. The report’s conclusion contradicts some theories which assert that Al-Qaeda (or another individual or entity) used knowledge of the imminent 9-11 attacks to bet against the markets. The report clearly states, "We have not developed any evidence suggesting that those who had advance knowledge of the September 11 attacks traded on the basis of that information."

United Airlines and American Airlines are the two stocks most frequently cited as being sold short before the attacks. The Commission's report finds that there was a sharp uptick of put options (similar to short selling) on United and American stock on 6 September 2001 and 10 September 2001. However, the report concluded that these upticks were due to the release of lackluster airline industry figures and a recommendation from Options Hotline, a market newsletter. The 9 September 2001 newsletter recommended that readers utilize a put option on American Airlines stock because the company was "under pressure" and that its stock price was likely to decrease.

The investigation also analyzed five other industry groups: insurers; financial services; defense and aerospace; security providers; and travel and leisure services. In each case, the SEC reviewers (often working in conjunction with the DOJ, FBI, foreign governments, and trading houses) did not identify "suspicious activity" prior to 11 September.


http://nsarchive.wordpress.com/2010/04/30/document-friday-terrorist-insider-trading-the-secs-pre-september-11-2001-trading-review

[deconstruct911]

1. Not chance

http://www.cbsnews.com/stories/2001/09/19/eveningnews/main311834.shtml

An extraordinary number of trades were betting that American Airlines stock price would fall.

The trades are called "puts" and they involved at least 450,000 shares of American. But what raised the red flag is more than 80 percent of the orders were "puts", far outnumbering "call" options, those betting the stock would rise.

Sources say THEY HAVE NEVER SEEN THAT KIND OF IMBALANCE BEFORE, reports CBS News Correspondent Sharyl Attkisson. Normally the numbers are fairly even.

My emphasis- "they have never seen that kind of imbalance before" -(Hard to believe this is a result of a newsletter, particularly when they wont acknowledge the brokerage firms)

The United puts were never claimed, they were placed through the Alex Brown brokerage firm! ( just google "Buzzy Krongard + Mayo Shattuck)

http://www.independent.co.uk/news/business/news/mystery-of-terror-insider-dealers-631325.html
To the embarrassment of investigators, it has also emerged that the firm used to buy many of the "put" options – where a trader, in effect, bets on a share price fall – on United Airlines stock was headed until 1998 by "Buzzy" Krongard, now executive director of the CIA.
http://www.blonnet.com/2002/02/11/stories/2002021100100900.htm
Things get pretty murky at this point. Because, as the investigative writer, Mr Tom Flocco, has pointed out, Deutsche Bank Alex Brown was once headed by a gentleman called A. B. `Buzzy' Krongard who is currently Executive Director of the Central Intelligence Agency (CIA).

This fact may not be significant. And then again, it may. After all, there has traditionally been a close link between the CIA, big banks and the brokerage business.

Things get murky indeed, and the commision, FBI, SEC, etc are not much help!




Dont forget about the Convar story either: http://archives.cnn.com/2001/TECH/industry/12/20/wtc.harddrives.idg/

http://www.youtube.com/watch?v=4-OClX54EFQ -(6 month after 9 11!!!!!)

"ANOTHER 9-11 MYSTERY...note they don't give the name of the company in Pirmasens, Germany. What is on these recovered hard drives? No one has said so far, but some of the data pertains to stock options trading in which 'unknown speculators' bet heavily that the stock prices of the U.S. airlines would sharply fall in September 2001. SEC Chairman at that time, Harvey Pitt, said of these mysterious options traders, "We will find them, wherevery they are." But did the SEC, FBI, etc...ever find them? They never said."

[Make7]

2. UAL and AMR Option Volume: August 20 - September 10, 2001

 

[deconstruct911]

3. Two great videos

About the put options.

http://www.youtube.com/watch?v=hd0Vwg6DVPI

http://www.youtube.com/watch?v=I6h2CyldX6c&feature=related

[Make7]

4. Weren't the 9/11 families requesting to see the SEC report? ( n/t )

[deconstruct911]

5. Marsh + AA

Sept 10 stock option trading on American Airlines: 375 calls VS 2,282 puts

Sept 10 stock option trading on Marsh & McLennan : 400 calls VS 2,782 puts

Note: Floor numbers 93-99 are part of American Airlines Flight 11's impact area.

100 Marsh USA
99 Marsh USA
98 Marsh USA
97 Marsh USA
96 Marsh USA
95 Marsh USA
94 Marsh USA
93 Marsh USA, Fred Alger Management

Also it appears the SEC report doesn't deal with the large increase in purchases of US Treasury bonds shortly before 9/11, "including a single $5 billion trade," as reported by the Wall Street Journal Oct 2, 2001:

[Make7]

6. Wouldn't interest rate swaps be much more profitable than purchasing Treasury bonds?

Actually wouldn't damn near anything be more profitable than large purchases of U.S. Treasury bonds if someone wanted to profit from upcoming attacks?

Hypothetically speaking, if you were the one that knew in advance the what, when, where and how of the 9/11 attacks; how would making large purchases of U.S. Treasury bonds be an intelligent and/or profitable investment?

I really am curious. Perhaps I'm missing something. Can anyone make a reasonable case for making large purchases of U.S. Treasury bonds to profit from such a circumstance?
 

[deconstruct911]

7. Damn straight they profited!

Good freaking luck getting the origanl article but it was WELL documented at first and then simply dropped!

Titled:"Treasury Bonds Enter Purview of U.S. Inquiry Into Attack Gains"

by Charles Gasparino and Gregory Zuckerman
The Wall Street Journal
October 2, 2001

http://s3.amazonaws.com/911timeline/2001/wallstreetjournal100201.html

The SEC has issued terse acknowledgements that it is looking into suspicious financial transactions to see if they are connected to terrorist organizations. But the scale of the stock and bond activity under scrutiny belies the notion that it could be the work of Osama bin Laden’s guerrilla band, let alone the fanatics who carried out the September 11 atrocities.

Over the past several days the Wall Street Journal has carried reports of the SEC and Secret Service probes, and dispatches have been published by the Associated Press and USA Today. But the New York Times and the Washington Post have remained strangely silent, and the network news outlets have said nothing.

The Wall Street Journal reported on October 2 that the ongoing investigation by the SEC into suspicious stock trades had been joined by a Secret Service probe into an unusually high volume of five-year US Treasury note purchases prior to the attacks. The Treasury note transactions included a single $5 billion trade.

As the Journal explained: “Five-year Treasury notes are among the best investments in the event of a world crisis, especially one that hits the US. The notes are prized for their safety and their backing by the US government, and usually rally when investors flee riskier investments, such as stocks.” The value of these notes, the Journal pointed out, has risen sharply since the events of September 11.

The article went on to quote Michael Shamosh, a bond-market strategist for Tucker Anthony Inc., who said, “If they were going to do something like this they would do it in the five-year part of the market. It’s extremely liquid, and the tracks would be hard to spot.”
http://www.wsws.org/articles/2001/oct2001/bond-o05.shtml

[deconstruct911]

8. To go along with what I mentioned

“Let me tell you what Marsh was up to… In 2000 SilverStream was contracted by Marsh to provide a technological solution beyond what we had done for any of the above-named companies; in sofar as it would be used to electronically connect Marsh to its major business partners via internet portals, for the purpose of creating “paperless transactions” and expediting revenue and renewal cycles, and built from the ground up at the client’s site.
SilverStream provided a specific type of connectivity that was used to link AIG and Marsh & McLennan- the first two commercial companies on the planet to employ this type of transaction- and in fact Marsh was presented with something called the ACORD Award in the summer of 2001 for being the first Commercial Corporation to do so and what you should take away from that is this: it means that no other companies were doing this type of transaction, so the question in your mind should be- what then were Marsh and AIG doing, and why did they need to leverage technologies that no other commercial entity on the face of the earth needed to conduct business?”
Richard Andrew Grove, SilverStream Software. Ex-client for Marsh & McLennan

In Michael Ruppert’s book “Crossing the Rubicon” he explains details of Deutsche banks roll.

"Returning to Ruppert's comments: "The Reuter's story was partially confirmed for me when I was contacted by a Deutsche Bank employee who had survived the attacks by fleeing the WTC after the first plane hit. According to the employee, about five minutes before the attack the entire Deutsche Bank computer system had been taken over by something external that no one in the office recognized and every file was downloaded at lightening speed to an unknown location." End of quote.