RE: 9-11 airline stocks, I don’t believe those short positions were ever covered.
RE: 9-11 airline stocks, I don’t believe those short positions were ever covered.
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That’s rather irrelevant to the issue of prior knowledge. However, the value of the unclaimed profits was only $2.5 million much less than what was made on other various transactions. These trades also happened in numerous countries, not just the NYSE. However, it should be asked why were profits just left unclaimed?
It wasn’t just shorts that were the issue, and it wasn’t just airlines-—Article from the Independent Australia:
9/11 terrorists made millions on the stock market
Terrorism: the ultimate in insider trading
Dr Hugh McDermott, senior lecturer in law enforcement at the CSU Australian Graduate School of Policing in Manly, says terrorists make money by speculating on the markets.
“When terrorists have ‘inside information’ about an imminent attack, they purchase financial derivatives before the attack and make millions from the subsequent market movements.
American Airlines’ share price dropped 39 per cent after the 9/11 attacks and United Airlines dropped 42 per cent. Even a novice trader can see the windfall that could be achieved in shorting these stocks before a terrorist attack.”
Market movements — click the link for details
https://independentaustralia.net/article-display/911-terrorists-made-millions-on-the-stock-market,3738
The most important insider trading crime ever:
The International Organisation of Securities Commissions has stated that the financial manoeuvres that had taken place in the days prior to 9/11 amounted to several hundred million dollars, constituting “…the most important crime of insider trading ever committed”.
Massive market irregularities in the days preceding the attacks delivered huge profits to ‘someone, somewhere.
That is contrary to the US Commission Report.
Dr McDermott strongly disagreed with US Commission Report and his statement regarding their conclusion follows:
“This seems implausible, and this explanation overlooks some important facts. Short selling was up 11 per cent on airlines due to the global downturn following the ‘dot com bust’, but it was up around 40 per cent on United and American Airlines. Surges in call options on gold and oil were also not explained.
“The 9/11 Commission Report has been widely criticised, and academic quantitative studies have confirmed that there is evidence of unusual option market activity in the days leading up to 9/11 that is consistent with investors trading on advance knowledge of the attacks.”
Dr McDermott notes that in its new market supervision role, ASIC monitors for unusual trading patterns to detect insider trading offences under the Corporations Act 2001, but these capabilities could be leveraged to detect potential terrorist insiders.
“These types of irregular trading patterns could be used as a ‘seismograph’ to indicate that a terrorist attack may be about to occur. By working with Australia’s counter-terrorism agencies, ASIC could provide critical information to law enforcement teams charged with fighting extremists.
“Combining the specialist skill of market operators with that of law enforcement will provide another element to protect our society.”
* A ‘put option’ is an agreement to buy a commodity at a certain price in the future.
FROM AN ADDITIONAL SOURCE -Noted below are various transactions:
Pre-9/11 Put Options on Companies Hurt by Attack Indicates Foreknowledge
Financial transactions in the days before the attack suggest that certain individuals used foreknowledge of the attack to reap huge profits. The evidence of insider trading includes:
Huge surges in purchases of put options on stocks of the two airlines used in the attack — United Airlines and American Airlines
Surges in purchases of put options on stocks of reinsurance companies expected to pay out billions to cover losses from the attack — Munich Re and the AXA Group
Surges in purchases of put options on stocks of financial services companies hurt by the attack — Merrill Lynch & Co., and Morgan Stanley and Bank of America
Huge surge in purchases of call options of stock of a weapons manufacturer expected to gain from the attack — Raytheon
Huge surges in purchases of 5-Year US Treasury Notes
THE SEC INVESTIGATED AS DID OTHER COUNTRIES
The stated results were that the people involved had no ties with Bin Laden so it was irrelevant.
Specifically, David Callahan – executive editor of SmartCEO – submitted a Freedom of Information Act request to the SEC regarding the pre-9/11 put options.
The SEC responded:
This letter is in response to your request seeking access to and copies of the documentary evidence referred to in footnote 130 of Chapter 5 of the September 11 (9/11) Commission Report.
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We have been advised that the potentially responsive records have been destroyed.
If the SEC had responded by producing documents showing that the pre-9/11 put options had an innocent explanation (such as a hedge made by a smaller airline), that would be understandable.
If the SEC had responded by saying that the documents were classified as somehow protecting proprietary financial information, I wouldn’t like it, but I would at least understand the argument.
But destroyed? Why?
http://washingtonsblog.com/2010/06/sec-government-destroyed-documents-regarding-pre-911-put-options.html
References
1. Insider Trading Apparently Based on Foreknowledge of the 9/11 Attacks, London Times, 9/18/01 [cached]
2. Put/Call Ratio, StreetAuthority.com,
3. Profiting From Disaster?, CBSNews.com, 9/19/01 [cached]
4. Prices, Probabilities and Predictions, OR/MS Today, [cached]
5. Exchange examines odd jump, Associated Press, 9/18/01 [cached]
6. SEC asks Goldman, Lehman for data, Bloomberg News, 9/20/01 [cached]
7. Black Tuesday: The World’s Largest Insider Trading Scam?, ict.org.il, September 19, 2001 [cached]
8. Suspicious profits sit uncollected Airline investors seem to be lying low, San Francisco Chronicle, 9/29/01 [cached]
9. Profits of doom, telegraph.co.uk, 9/23/01 [cached]
10. Profits of doom ..., 9/23/01
11. Black Tuesday ..., 9/19/01
12. Bank of America among 38 stocks in SEC’s attack probe, Bloomberg News, 10/3/01 [cached]
13. Bank of America ..., 10/3/01
14. Raytheon, corpwatch.org,
15. Suspicious trading points to advance knowledge by big investors of September 11 attacks, wsws.org, 10/5/01 [cached]
16. Bank of America ..., 10/3/01
17. SEC wants data-sharing system Network of brokerages would help trace trades by terrorists, San Francisco Chronicle, 9/19/01 [cached]
18. Crossing the Rubicon, , page 243
19. Crossing the Rubicon, , page 238-239,634
20. Whether advance knowledge of U.S. attacks was used for profit, New York Times, 9/30/01 [cached]
21. Suspicious profits ..., 9/29/01
STINKS TO HIGH HEAVEN!!!!!!!!!!!!!!!