Hi,

The film says something to the effect that there has been no real investigation into the suspicious options trading in stocks that would quickly fall following 9/11. But there is apparent evidence to the contrary located here:

http://www.snopes.com/rumors/putcall.asp

This page quotes a report that says they investigated this thoroughly and it was just coincidental, etc, etc.

It seems like a pretty ridiculously big coincidence to me, but I'm wondering: has anyone here seen specific evidence that would undermine the findings of this investigation?

Thanks,
Jason

I was just about to post the following when I saw this thread - so instead I'll stick it here:

Can someone direct me to some good non-911 (eg-general) put-option info they may have come across or point me to a thread - I couldn't see one that answered my queries.

Cheers peeps.

ps:-sorry jasona - not a hijack but just tagging along. Hope that's ok.

Question: How many coincidences do these people think they can get away with??

Answer: As many as we let them get away with.

I agree with the overall spirit of your response, but that's not an excuse to not thoroughly consider the evidence.

Does anybody have any contrary evidence to what is posted at the link I posted above? Is this new information that needs to effect a change in future versions of LC, or is this something that has already been addressed?

Thanks,
Jason

its been address. I have forgotten the connection, but I remember the people investigating have a government connection. You might find it if you use the search.

I haven't been able to find anything using the search function... does anybody know any specific continued support for the idea that there still hasn't been an investigation into this, or if there has, that the "coincidence" isn't one?

Jason

I'm all about having an "official" hard copy of this kind of information--It makes it easier for me to put it under scrutiny (as I work with computers and have to stare at numerous monitors all day). Is there any official report that any of you are aware of?

Here's what I found:

the firm used to place the "put options" on United Airlines stock was, until 1998, managed by the man who is now in the number three Executive Director position at the Central Intelligence Agency. Until 1997 A.B. "Buzzy" Krongard had been Chairman of the investment bank A.B. Brown. A.B. Brown was acquired by Banker's Trust in 1997. Krongard then became, as part of the merger, Vice Chairman of Banker's Trust-AB Brown, one of 20 major U.S. banks named by Senator Carl Levin this year as being connected to money laundering. Krongard's last position at Banker's Trust (BT) was to oversee "private client relations." In this capacity he had direct hands-on relations with some of the wealthiest people in the world in a kind of specialized banking operation that has been identified by the U.S. Senate and other investigators as being closely connected to the laundering of drug money.

Krongard (re?) joined the CIA in 1998 as counsel to CIA Director George Tenet. He was promoted to CIA Executive Director by President Bush in March of this year. BT was acquired by Deutsche Bank in 1999. The combined firm is the single largest bank in Europe. And, as we shall see, Deutsche Bank played several key roles in events connected to the September 11 attacks.

"The source familiar with the United trades identified Deutsche Bank Alex Brown, the American investment banking arm of German giant Deutsche Bank, as the investment bank used to purchase at least some of these options." This was the operation managed by Krongard until as recently as 1998.

Source

Thanks Style. I read the article you referenced... it was very interesting and informative.

As a followup to my original post...

I have been doing some research into the snopes.com article I referenced in my first post. The article refers to three sources listed at the bottom of the page.

Today I emailed the authors of two of the stories. One emailed me back so far, with the text of his original story. I've asked some followup questions, but I wouldn't expect an answer back already... I also emailed snopes.com and the Chicago Board of Options Exchange (which is the group who was supposedly conducting the investigation into these matters immediately following 9/11).

I'll let you all know what I find out...

Jason

btw, I've put the article that was emailed to me up as the main page of www.ausmii.com . I won't be leaving it there, so if anyone is interested in having it, go there ASAP and copy it to your local computer.

Jason

i need a hardcopy of the trading reports.

there was a bbc article that didnt go into nearly emough detail- but did explain some irregularities.

I got a response from the CBOE... they forwarded me the text of another article (this one from 2003). I'll post it below...

I was also directed to the SEC website, and found this:

http://www.sec.gov/news/press/2004-98.htm

---------

FBI Concludes No Terrorist Insider Trading Occurred in U.S.
2003-09-18 11:56 (New York)

FBI Concludes No Terrorist Insider Trading Occurred in U.S.

Sept. 18 (Bloomberg) -- U.S. criminal investigators have concluded that there was no insider trading in U.S. securities markets by people with advance knowledge of the Sept. 11 terrorist attacks of 2001, an FBI spokesman said.

The Federal Bureau of Investigation found that a pre-attack surge of trading in options that bet on a drop in the stock of AMR Corp., which owns American Airlines, and UAL Corp., which owns United Airlines, was not linked to terrorists, FBI spokesman Paul Bresson said in an e-mail to Bloomberg News.

The two airlines owned the jets that terrorists commandeered and then crashed into the World Trade Center in New York and the Pentagon outside Washington. The FBI investigated possible insider trading on airline and insurance securities in a search for accomplices who might have tried to profit from the attacks.

``The vast majority of trading was conducted by investment hedge funds implementing bearish investment strategies or hedging a line position of common stock,'' the e-mail said. ``No criminal violation or intelligence linking the matter to terrorist activity was identified.''

Bresson didn't identify the hedge funds or any insurance company. Bresson's e-mail came in response to a Bloomberg inquiry
about the status of the investigation.

Numerous Interviews

``We conducted numerous interviews of witnesses and trading professionals,'' Bresson wrote. ``Documents including trading records and SEC data were also recovered and reviewed. These documents detail transactions occurring before and after the 9/11 attack. The investigative efforts did not identify any involvement by terrorists in short selling or trading of put options,'' which let investors bet that a stock will decline.

Bresson said the matter was also ``extensively reviewed'' by the U.S. Attorney's Office in the Southern District of New York and by the U.S. Securities and Exchange Commission.

Lorie Van Auken, the widow of a Cantor Fitzgerald LP bond trader who died in the Sept. 11 attacks, said the FBI told her and other victims' relatives about the conclusion in July. The FBI declined to name the hedge funds when asked by the relatives, Van Auken said in an interview from her home in New Jersey.

``I have a problem with that answer,'' Van Auken said ``If there's nothing to hide, then why can't they tell us?''

Options trading statistics examined by Bloomberg News in the weeks after Sept. 11, 2001, showed a surge of trading in the days before the attacks.

Options Trading

On Sept. 10, 2001, for example, 1,535 contracts changed hands on options that let investors profit if AMR stock fell below $30 per share before the following Oct. 20. That was almost five times the total number of those Oct. 20 put options that traded before Sept. 10, according to Bloomberg data.

AMR closed at $29.70 the day before the terrorist attacks and fell as much as 47 percent to $15.90 when trading resumed on Sept. 17, 2001. UAL, which closed at $30.82 on Sept. 10, 2001, fell as much as 43 percent to $17.50 when U.S. equity markets reopened a week later.

The FBI said in January 2002 that Spanish authorities had uncovered evidence pointing to possible terrorist trading and that the FBI was assisting with that investigation.

Bresson's e-mail didn't answer a question about the status of the Spanish probe and officials at the Spanish Interior Ministry declined to comment.

--Judy Mathewson in Washington at (1) 202-624-1915 or jmathewson@bloomberg.net with reporting by Paul Tobin in Madrid.
Editor: Parry

Story illustration: For more information on the surge in trading of bearish options before the attacks, see: ``CBOE, Philadelphia Probed Possible Terrorist Trades'' story of 9/24/01."