Remembering the Insider Trading Before and on 9/11 and the Subsequent Coverup by the SEC

One consultant, Jonathan Winer, told ABC: “it’s absolutely unprecedented to see cases of insider trading covering the entire world from Japan to the US to North America to Europe.”[1] The list of affected nations was long, and included the US, Germany, Japan, France Luxembourg, Hong Kong, the UK, Switzerland and Spain.[2] Soon, independent investigations were underway on three continents in the belief that the paper trail would lead to the terrorists.

Press statements by leading figures in the international banking community left little doubt that the evidence was compelling. Ernst Welteke, President of the German Deutsche Bundesbank, told reporters that “a preliminary review by German regulators and bank researchers showed there were highly suspicious sales of shares in airlines and insurance companies, along with major trades in gold and oil markets, before September 11 that suggest….advance knowledge of the attacks. Welteke said that his researchers came across….almost irrefutable proof of insider trading.” Welteke was blunt: “What we found makes us sure that people connected to the terrorists must have been trying to profit from this tragedy.”[3]

So the insider trading was very obvious in the early days after the attack. Everyone seemed gung-ho to track down these traders as it would lead directly to the terrorists.

Using a pioneering laser scanning technology to find data on damaged computer hard drives and main frames found in the rubble of the World Trade Center and other nearby collapsed buildings, Convar has recovered information from 32 computers that support assumptions of dirty doomsday dealings.

"The suspicion is that inside information about the attack was used to send financial transaction commands and authorizations in the belief that amid all the chaos the criminals would have, at the very least, a good head start," said Convar director Peter Henschel.

They were even able to recover hundreds of harddrives from the rubble and were able to recover almost all of the data held on them.

"It could turn out that Americans went on an absolute shopping binge on that Tuesday morning. But at this point there are many transactions that cannot be accounted for,'' Henschel said."

"Not only the volume but the size of the transactions was far higher than usual for a day like that. There is a suspicion that these were possibly planned to take advantage of the chaos.''

"There is a suspicion that some people had advance knowledge of the approximate time of the plane crashes in order to move out amounts exceeding $100 million,'' Wagner said. "They thought that the records of their transactions could not be traced after the main frames were destroyed.''

After some time all mention of this investigation seemed to disappear and people started wondering what the SEC had found.

In his book “Crossing the Rubicon”, former LAPD detective Mike Ruppert explains the SEC’s unprecedented move to deputize:

What happens when you deputize someone in a national security or criminal investigation is that you make it illegal for them to disclose publicly what they know…. In effect, they become government agents and are controlled by government regulations rather than their own conscience. In fact, they can be thrown in jail without a hearing if they talk publicly. I have seen this implied threat time and again with federal investigations, intelligence agents, and even members of the United States Congress who are bound so tightly by secrecy oaths and agreements that they are not even able to disclose criminal activities inside the government for fear of incarceration.[13]

Notice, this surely means that Al Qaeda had nothing to do with the insider trading.[14] When the evidentiary trail led back to Wall Street, the SEC moved quickly to control the evidence and muzzle potential witnesses. Despite the best efforts of the SEC, a few details did leak to the world press. In mid-October 2001, The Independent (UK) reported that, “To the embarrassment of investigators, it has….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 Alvin ‘Buzzy’ Krongard, now executive director of the CIA.”[15]

Well it turns out that when the SEC found direct connections between the firms involved in the trading and the CIA they moved to make everything secret.

The evidence was all the more incriminating, because in at least one case the purchaser failed to collect a reported $2.5 million in profits made from the collapsing share price of UAL stock. The only plausible explanation was that someone at the purchasing bank feared exposure and subsequent arrest.

So after the trail seemingly goes cold David Callahan submits a FOIA request to find out what the SEC had discovered.

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?

The documents were destroyed.