Investigating "Put Options" Just Before 9/11

SEC SECRET PROBE OF STOCK DEALINGS BEFORE 9/11

Between August 26 and September 11, 2001, a group of speculators, identified by the American Securities and Exchange Commission as Israeli citizens, sold “short” a list of 38 stocks that could reasonably be expected to fall in value as a result of the pending attacks. These speculators operated out of the Toronto, Canada and Frankfurt, Germany, stock exchanges and their profits were specifically stated to be “in the millions of dollars.”

Short selling of stocks involves the opportunity to gain large profits by passing shares to a friendly third party, then buying them back when the price falls. Historically, if this precedes a traumatic event, it is an indication of foreknowledge. It is widely known that the CIA uses the Promis software to routinely monitor stock trades as a possible warning sign of a terrorist attack or suspicious economic behavior. A week after the Sept.11 attacks, the London Times reported that the CIA had asked regulators for the Financial Services Authority in London to investigate the suspicious sales of millions of shares of stock just prior to the terrorist acts. It was hoped the business paper trail might lead to the terrorists.

Investigators from numerous government agencies are part of a clandestine but official effort to resolve the market manipulations There has been a great deal of talk about insider trading of American stocks by certain Israeli groups both in Canada and Germany between August 26 and the Sept.11 attacks on the World Trade Center and the Pentagon.

Lynne Howard, a spokeswoman for the Chicago Board Options Exchange (CBOE), stated that information about who made the trades was available immediately. "We would have been aware of any unusual activity right away. It would have been triggered by any unusual volume. There is an automated system called 'blue sheeting,' or the CBOE Market Surveillance System, that everyone in the business knows about. It provides information on the trades - the name and even the Social Security number on an account - and these surveillance systems are set up specifically to look into insider trading. The system would look at the volume, and then a real person would take over and review it, going back in time and looking at other unusual activity."

Howard continued, "The system is so smart that even if there is a news event that triggers a market event it can go back in time, and even the parameters can be changed depending on what is being looked at. It's a very clever system and it is instantaneous. Even with the system, though, we have very experienced and savvy staff in our market-regulations area who are always looking for things that might be unusual. They're trained to put the pieces of the puzzle together. Even if it's offshore, it might take a little longer, but all offshore accounts have to go through U.S. member firms - members of the CBOE - and it is easily and quickly identifiable who made the trades. The member firm who made the trades has to have identifiable information about the client under the 'Know Your Customer' regulations (and we share all information with the Securities and Exchange Commission.)"

Given all of this, at a minimum the CBOE and government regulators who are conducting the secret investigations have known for some time who made the options puts on a total of 38 stocks that might reasonably be anticipated to have a sharp drop in value because of an attack similar to the 9/11 episode. The silence from the investigating camps could mean several things: Either terrorists are responsible for the puts on the listed stocks or others besides terrorists had foreknowledge of the attack and used this knowledge to reap a nice financial harvest from the tragedy.

Adam Hamilton of Zeal LLC, a North Dakota-based private consulting company that publishes research on markets worldwide, stated that "I heard that $22 million in profits was made on these put options..."

Federal investigators are continuing to be so closed-mouthed about these stock trades, and it is clear that a much wider net has been cast, apparently looking for bigger international fish involved in dubious financial activity relating to the 9/11 attacks on the world stock markets.

Just a month after the attacks the SEC sent out a list of stocks to various securities firms around the world looking for information. The list includes stocks of American, United, Continental, Northwest, Southwest and US Airways airlines, as well as Martin, Boeing, Lockheed Martin Corp., AIG, American Express Corp, American International Group, AMR Corporation, Axa SA, Bank of America Corp, Bank of New York Corp, Bank One Corp, Cigna Group, CNA Financial, Carnival Corp, Chubb Group, John Hancock Financial Services, Hercules Inc, L-3 Communications Holdings, Inc., LTV Corporation, Marsh & McLennan Cos. Inc., MetLife, Progressive Corp., General Motors, Raytheon, W.R. Grace, Royal Caribbean Cruises, Ltd., Lone Star Technologies, American Express, the Citigroup Inc. ,Royal & Sun Alliance, Lehman Brothers Holdings, Inc., Vornado Reality Trust, Morgan Stanley, Dean Witter & Co., XL Capital Ltd., and Bear Stearns.

The Times said market regulators in Germany, Japan and the US all had received information concerning the short selling of insurance, airlines and arms companies stock, all of which fell sharply in the wake of the attacks.

City of London broker and analyst Richard Crossley noted that someone sold shares in unusually large quantities beginning three weeks before the assault on the WTC and Pentagon.

He said he took this as evidence that someone had insider foreknowledge of the attacks.

"What is more awful than he should aim a stiletto blow at the heart of Western financial markets?" he added. "But to profit from it? Words fail me."

The US Government also admitted it was investigating short selling, which evinced a compellingly strong foreknowledge of the coming Arab attack.

There was unusually heavy trading in airline and insurance stocks several days before Sept.11, which essentially bet on a drop in the worth of the stocks.

It was reported by the Interdisciplinary Center, a counter-terrorism think tank involving former Israeli intelligence officers, that insiders made nearly $16 million profit by short selling shares in American and United Airlines, the two airlines that suffered hijacking, and the investment firm of Morgan Stanley, which occupied 22 floors of the WTC.

Apparently none of the suspicious transactions could be traced to bin Laden because this news item quietly dropped from sight, leaving many people wondering if it tracked back to American firms or intelligence agencies.

Most of these transactions were handled primarily by Deutsche Bank-A.B.Brown, a firm which until 1998 was chaired by A. B."Buzzy" Krongard, who later became executive director of the CIA.

More serious was an article in the Sept. 28, 2001 edition of the Washington Post stating that officials with the instant messaging firm of Odigo in New York confirmed that two employees in Israel received text messages warning of an attack on the WTC two hours before the planes crashed into the buildings!

The firm's vice president of sales and marketing, Alex Diamandis said it was possible that the warning was sent to other Odigo members, but they had not received any reports of such.

The day after, the Jerusalem Post claimed two Israelis died on the hijacked airplanes and that 4,000 were missing at the WTC.

A week later, a Beirut television station reported that 4,000 Israeli employees of the WTC were absent the day of the attack.

This information spread across the Internet but was quickly branded a hoax.

On Sept. 19, the Washington Post reported about 113 Israelis were missing at the WTC and the next day, President Bush noted more than 130 Israelis were victims.

Finally, on Sept. 22, the New York Times stated "There were, in fact, only three Israelis who had been confirmed as dead: two on the planes and another who had been visiting the towers on business and who was identified and buried."

Investigators from numerous government agencies are part of a clandestine but official effort to resolve the market manipulations There has been a great deal of talk about the insider trading of American stocks by certain Israeli groups both in Canada and Germany between August 26 and the Sept.11 attacks on the World Trade Center and the Pentagon.

Government investigators have maintained a diplomatic silence about a Department of Justice (DOJ) probe of possible profiteering by interested parties with advance knowledge of the attack.

On Sept. 6, 2001, the Thursday before the tragedy, 2,075 put options were made on United Airlines and on Sept. 10, the day before the attacks, 2,282 put options were recorded for American Airlines. Given the prices at the time, this could have yielded speculators between $2 million and $4 million in profit.

The matter still is under investigation and none of the government investigating bodies -including the FBI, the Securities and Exchange Commission (SEC) and DOJ -are speaking to reporters about insider trading. Even so, suspicion of insider trading to profit from the Sept. 11 attacks is not limited to U.S. regulators. Investigations were initiated in a number of places including Japan, Germany, the United Kingdom, France, Luxembourg, Hong Kong, Switzerland and Spain. As in the United States, all are treating these inquiries as if they were state secrets.

* Original Source is BRNews.org

Evidence for Foreknowledge by US Officials

NOTE that his is excerpted from the source article: 9/11 and the American Empire: How Should Religious People Respond? by David Ray Griffin

"A central aspect of the official story about 9/11 is that the attacks were planned entirely by al Qaeda, with no one else knowing the plans. A year after the attacks, FBI Director Robert Mueller said: "To this day we have found no one in the United States except the actual hijackers who knew of the plot."[19] Since that time, federal officials have had to admit that they had received far more warnings prior to 9/11 than they had previously acknowledged. But these admissions, while raising the question of why further safety measures were not put in place, do not necessarily show that federal officials had specific foreknowledge of the attacks. One could still, as did the 9/11 Commission, accept the conclusion published at the end of 2002 by the Congressional Joint Inquiry, according to which “none of [the intelligence gathered by the US intelligence community] identified the time, place, and specific nature of the attacks that were planned for September 11, 2001.”[20]

Unfortunately for the official account, however, there are reports indicating that federal officials did have that very specific type of information. I will give two examples.

David Schippers and the FBI Agents: The first example involves attorney David Schippers, who had been the chief prosecutor for the impeachment of President Clinton. Two days after 9/11, Schippers declared that he had received warnings from FBI agents about the attacks six weeks earlier--warnings that included both the dates and the targets. These agents had come to him, Schippers said, because FBI headquarters had blocked their investigations and threatened them with prosecution if they went public with their information. They asked Schippers to use his influence to get the government to take action to prevent the attacks. Schippers was highly respected in Republican circles, especially because of his role in the impeachment of Clinton. And yet, he reported, Attorney General Ashcroft repeatedly failed to return his calls.[21]

Schippers’ allegations about the FBI agents were corroborated in a story by William Norman Grigg called “Did We Know What Was Coming?”, which was published in The New American, a very conservative magazine. According to Grigg, the three FBI agents he interviewed told him “that the information provided to Schippers was widely known within the Bureau before September 11th.”[22]

If Schippers, Grigg, and these agents are telling the truth, it would seem that when FBI Director Mueller claimed that the FBI had found no one in this country with advance knowledge of the plot, he was not telling the truth.

The Put Options: The government also would have had foreknowledge of the attacks because of an extraordinarily high volume of “put options” purchased in the three days before 9/11. To buy put options for a particular company is to bet that its stock price will go down. These purchases were for two, and only two, airlines--United and American--the two airlines used in the attacks, and for Morgan Stanley Dean Witter, which occupied 22 stories of the World Trade Center. The price of these shares did, of course, plummet after 9/11. As the San Francisco Chronicle said, these unusual purchases, which resulted in profits of tens of millions of dollars, raise “suspicions that the investors . . . had advance knowledge of the strikes.”[23]

For our purposes, the most important implication of this story follows from the fact that US intelligence agencies monitor the market, looking for signs of imminent untoward events.[24] These extraordinary purchases, therefore, would have suggested to intelligence agencies that in the next few days, United and American airliners were going to be used in attacks on the World Trade Center. This is fairly specific information.

These two examples imply the falsity of the Joint Inquiry’s statement that “none of [the intelligence gathered by the US intelligence community] identified the time, place, and specific nature of the attacks.” Indeed, one of the FBI agents interviewed by William Grigg reportedly said: “Obviously, people had to know. . . . It’s terrible to think this, but this must have been allowed to happen as part of some other agenda.”[25]

He was right. This would be terrible. There is considerable evidence, however, that the full truth is even more terrible---that the reason some US officials had foreknowledge of the attacks is because they had planned them."

Endnotes:

19. I quoted this statement in The New Pearl Harbor (henceforth cited as NPH), 69.

20. This statement is contained in the summary of the final report of the Joint Inquiry conducted by the House and Senate intelligence committees, posted at http://intelligence.senate.gov/press.htm under December 11, 2002; it is quoted in NPH, 69.

21. See The Alex Jones Show, Oct. 10, 2001; “David Schippers Goes Public: The FBI Was Warned,” Indianapolis Star, Oct. 13, 2001; and “Active FBI Special Agent Files Complaint Concerning Obstructed FBI Anti-Terrorist Investigations,” Judicial Watch, Nov. 14, 2001.

22. William Norman Grigg, “Did We Know What Was Coming?” The New American 18/5 (March 11, 2002).

23. The San Francisco Chronicle, Sept. 29, 2001. The 9/11 Commission tried to scotch these suspicions. Its most important claim is that it found that 95 percent of the puts for United Airlines were purchased by “[a] single U.S.-based institutional investor with no conceivable ties to al Qaeda” (The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks upon the United States, Authorized Edition [New York: W. W. Norton, 2004], 499 note 130). But this argument is viciously circular. What is at issue is whether people other than al Qaeda knew about the attacks in advance, perhaps because they had helped plan them. But the Commission simply assumes that al Qaeda and only al Qaeda planned and knew about the attacks. Accordingly, runs the Commission’s logic, if the investors who purchased the put options in question had no ties with al Qaeda, they could not possibly have had insider knowledge. They were simply lucky.

24. UPI, Feb. 13, 2001; Michael Ruppert, “Suppressed Details of Criminal Insider Trading Lead Directly into the CIA’s Highest Ranks,” From the Wilderness Publications (www.fromthewilderness.com), Oct. 9, 2001.

25. William Norman Grigg, “Did We Know What Was Coming?” The New American (www.thenewamerican.com) 18/5: March 11, 2002.