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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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Posted on 04/15/2003 12:34:46 PM PDT by JohnGalt
9-11 Insider Traders: Why don't we know who they are—or more importantly—why don't we care? By Michael Gaddy
From August 26th to September 11th 2001, events in the stock market should have alerted those in government that something was amiss. Were those trades missed by our "experts' that cost us 30 billion dollars in taxes each year or did our government know what was happening and look the other way? The presently unknown "speculators" operated out of the Toronto, Canada and Frankfurt, Germany, stock exchanges and their profits have been estimated to be in the billions of dollars.
These speculators sold "short" 38 stocks that could reasonably be expected to fall in value as a result of the attacks of September 11. 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.
The U.S. Central Intelligence Agency uses a tool called Promis to monitor the stock exchanges of the world so as to predict traumatic events. Historically, if such trading activity precedes a traumatic event, it is an indication of foreknowledge. Fox News on Oct. 16, 2001, broke stories disclosing the use of sophisticated Promis software by the FBI and the Justice Department. A multitude of court records and investigative reports have established not only the reality, but also the versatility of a program initially designed to incorporate data from a variety of data bases in different languages into one readable format. Fox and the Washington Times have both reported based on interviews with Justice Department officials that PROMIS is used to monitor banking and financial transactions in a virtual real-time environment.
All of the knowledge of these trades was known immediately as they occurred according to an expert with the Chicago Board Options Exchange (CBOE). Lynne Howard of the CBOE said: "We would have been aware of any unusual activity right away. Any unusual volume would have triggered it. 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. 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 that 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.)"
Taking a look at the specific trades gives us the actual companies that were involved in the trades and the irregular volume. The documented pre-Sept. 11 insider trading that occurred 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.
Not only selling short, but also "put options" were involved in the massive trading in the days prior to September 11. "Put options" are highly leveraged bets, tying up blocks of stock, that a given stock's share price will fall dramatically.
An examination of "put options" during this period with the above-mentioned companies would reveal the following: 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. This averages out to 75 times the number of normal activity on these entities.
No similar trading occurred on any other airlines. (Bloomberg Business Report, the Institute for Counterterrorism, Herzliyya, Israel citing data from the CBOE) Morgan Stanley saw, between Sept. 7 and Sept.10, an increase of 27 times in the purchase of put options on its shares. (Institute for Counterterrorism 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. (CBOE report)
Although quite a number of news agencies reported on such unusual activity in stock trading in the aftermath of September 11th, the subject has all but died in the past 15 months. Could it have been bin Laden and his operatives that profited from this activity? Apparently not, a National Public Radio report on Oct. 16 reported Britain's Financial Services Authority had cleared bin Laden and his operatives of insider trading.
Well, if it wasn't bin Laden, then who made all this money based on prior knowledge that the attacks were going to take place? The Israeli Institute for Counter-Terrorism was the first agency to release a detailed report on the insider trading. That alone is evidence of a direct relationship between the financial markets and terrorist investigations.
We are now engaged in a war that will take thousands of lives and cost untold billions of dollars. Our government has based the heart and soul of this war on its assessment of direct involvement by Iraq and its connections with terrorists and their attacks on this country. Why is this angle of who actually perpetrated the heinous acts of 9/11 not been pursued? If the people who placed these stock market transactions and made millions were not the perpetrators themselves, their prior knowledge makes them accomplices.
Consider the following: Government agencies queried say the matter is still under investigation and so 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.
Compare that with the following statements made in the days following September 11th.
60 Minutes from Sept. 19, 2001, "Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the U.S. stock options market." "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, 2001.
"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.
Germany's Bundesbank chief, Ernst Weltke, said "that a report of the investigation showed "bizarre" fiscal transactions prior to the attacks that could not have been chalked up to coincidence, they 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."
What were the actual profits garnered by the people with prior knowledge to the horror of 9/11? Andreas von Bulow, 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.
Regardless of how we choose to look at this issue, someone made a tremendous profit when their knowledge could have stopped the murder of over 3,000 people and billions of dollars in damages. All the experts in the business tell us the information on who made these trades was available almost instantaneously, up to and including Social Security Numbers! It has been over 18 months now that our government has known who these people are. Why are we not demanding our government tell us who profited from these heinous acts?
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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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It is in the breaking news sidebar! |
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Tin-Foil Hat Alert!
Speaking of morphing, when did the war on international terrorism become a war of retribution for 9/11?
I must have missed that one with my short attention span.
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