Put Options

betting against United and American Airlines before 9/11

One of the 9/11 scandals is the "put options" placed on United and American airlines stock values the week before 9/11 by someone trying to make a buck on the tragedy.

This was BIG NEWS in the world financial press in the weeks after the attacks, with numerous articles in mainstream media speculating that Osama had just made the sickest stock trade in history. However, most of the articles didn't mention that the Stock Markets are monitored in real time (among other reasons, it could provide intelligence about these types of threats). It is unlikely that someone perpetrating a major crime such as 9/11 would provide evidence of their planning such as the stock trades on United and American airlines, since it would draw serious scrutiny and probably disrupt plans for the atrocity (assuming the atrocity wasn't tacitly given the green light in order to provide the pretext for the Homeland Security police state and the seizure of the Middle East oil fields).

A few weeks later, From the Wilderness, published by Michael Ruppert, linked the put options on the affected airlines (and a few other companies, located in the towers) to A. B. Brown, a firm formerly headed by the Executive Director of the CIA (the number three position).

The stories about the put options suddenly disappeared from the media, and now only the underground press, largely on the web, talks about them. To date, there has not been any public investigation by the government of who placed the stock trades (A B Brown was merely one of the firms used, the identities of the traders is not publicly known).

When the 9/11 Commission report was released in 2004, it was available as a PDF download. The first thing I searched for was mention of the pre-9/11 stock trades on United and American airlines. The Commission report explained it was not significant, since the traders did not have connections to al-Qaeda. The report did not discuss if the traders had connections to the CIA.



Lars Schall

independent German journalist tracking the details of 9/11 insider trading

9/11 Terror Trading: Beware of a Limited Hangout, Part One

9/11 Terror Trading: Beware of a Limited Hangout, Part Two

9/11 Terror Trading: Beware of a Limited Hangout, Part Three

„Informed 9/11 Terror Trading“ – Lars Schall Responds To Jim Rickards‘ Limited Hangout

9/11 Terror Trading – 15 Years Later


Insider trading 9/11 ... the facts laid bare

There can be no dispute that speculative trade in put options - where a party bets that a stock will drop abruptly in value - spiked in the days around September 11, 2001 - even if the US Securities and Exchange Commission and the 9/11 Commission will not say so. More than a few people must have had advance warning of the terror attacks, and they cashed in to the tune of millions of dollars.


by Lars Schall



Understanding Special Operations

Understanding The Secret Team
Part III

an interview with Fletcher Prouty

A stock broker called me from Washington a few days before the Bay of Pigs was planned to take place and said, "Colonel Prouty -- he just happened to know me, he didn't know my job, but he said -- Colonel, can you give me any explanation why, all of a sudden, people from the Pentagon are calling me buying sugar stock?" Sugar stock had dropped to pennies, because Castro had boycotted American sugar down there and the companies had lost a lot of money. But, all of a sudden, people who knew about the prospect of the invasion were buying sugar stock $10,000, $20,000 at a time, and sugar stock demand was going up well before the Bay of Pigs landing. They were running it as a commercial venture.



Follow the Money? God forbid.
Why was the cashing out of billions of dollars just before the 9/11 attacks never investigated?

by Jim Hogue



They Made a Killing
Did people who knew about secret, CIA-led coups use that information to game the stock market?
By Ray Fisman
Posted Tuesday, Oct. 28, 2008


Mystery of terror `insider dealers'
by Chris Blackhurst, The Independent, 14 October 2001

Share speculators have failed to collect $2.5m (£1.7m) in profits made from the fall in the share price of United Airlines after the 11 September World Trade Centre attacks.
The fact that the money is unclaimed more than a month later has re-awakened investigators' interest in a story dismissed as coincidence.
It may be that investors who were able to predict the share price crash so skilfully are reluctant to be seen profiting from tragedy. But investigators now wonder whether there is a more sinister explanation.
The authorities are examining the possibility that if they knew what was coming, traders were intent on taking their profits immediately, before regulators had woken up to any possible scam. But investors failed to foresee that the first response of the US stock markets to the disaster was to suspend all trading for four days, thereby denying them the chance of cashing in their profits.
Further details of the futures trades that netted such huge gains in the wake of the hijackings have been disclosed. To the embarrassment of investigators, it has also 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 "Buzzy" Krongard, now executive director of the CIA.
Until 1997, Mr Krongard was chairman of Alex Brown Inc, America's oldest investment banking firm. Alex Brown was acquired by Bankers Trust, which in turn was bought by Deutsche Bank. His last post before resigning to take his senior role in the CIA was to head Bankers Trust -- Alex Brown's private client business, dealing with the accounts and investments of wealthy customers around the world.
There is no suggestion that Mr Krongard had advance knowledge of the attacks.
Between 6 and 7 September, the Chicago Board Options Exchange saw purchases of 4,744 "put" option contracts in UAL versus 396 call options -- where a speculator bets on a price rising. Holders of the put options would have netted a profit of $5m (3.3m) once the carrier's share price dived after 11 September. On 10 September, more trading in Chicago saw the purchase of 4,516 put options in American Airlines, the other airline involved in the hijackings. This compares with a mere 748 call options in American purchased that day. Investigators cannot help but notice that no other airlines saw such trading in their put options.
It was not just airlines that were targeted by remarkably canny investors. One of the biggest occupants of the World Trade Centre was Morgan Stanley, the investment bank. In the first week of September, an average of 27 put option contracts was bought each day in its shares. The total for the three days before the attacks was 2,157. Merrill Lynch, anotherWTC tenant, saw 12,215 put options bought in the four days before the attacks, when the previous days had seen averages of 252 contracts a day.

Copyright © 2001 Independent Digital (UK) Ltd
Reprinted for Fair Use Only.


the 9/11 Commission's explanation

from Nic in New York:
On the insider trading, the alibi:

A single U.S.-based institutional investor with no conceivable ties to al Qaeda purchased 95 percent of the UAL puts on September 6 as part of a trading strategy that also included buying 115,000 shares of American on September 10.

Ah. "No conceivable ties to al-Qaeda" equated with "no advance knowledge."
The assumption is that foreknowledge could come only through an al-Qaeda connection.
No mention of stories from London, Frankfurt, Tokyo et al. or of trades in anything other than UAL and AAR put options (WTC tenants, reinvestors).
What about the uncollected $2.5 million? Who was the "small airline" responsible for the puts purchased in London?

Al Qaeda has been alleged to have used a variety of illegitimate means, particularly drug trafficking and conflict diamonds, to finance itself. While the drug trade was a source of income for the Taliban, it did not serve the same purpose for al Qaeda,and there is no reliable evidence that Bin Ladin was involved in or made his money through drug trafficking.128 Similarly, we have seen no persuasive evidence that al Qaeda funded itself by trading in African conflict diamonds.129 There also have been claims that al Qaeda financed itself through manipulation of the stock market based on its advance knowledge of the 9/11 attacks. Exhaustive investigations by the Securities and Exchange Commission, FBI, and other agencies have uncovered no evidence that anyone with advance knowledge of the attacks profited through securities transactions.130. Highly publicized allegations of insider trading in advance of 9/11 generally rest on reports of unusual pre-9/11 trading activity in companies whose stock plummeted after the attacks. Some unusual trading did in fact occur,but each such trade proved to have an innocuous explanation. For example,the volume of put options- investments that pay off only when a stock drops in price-surged in the parent companies of United Airlines on September 6 and American Airlines on September 10-highly suspicious trading on its face. Yet,further investigation has revealed that the trading had no connection with 9/11. A single U.S.-based institutional investor with no conceivable ties to al Qaeda purchased 95 percent of the UAL puts on September 6 as part of a trading strategy that also included buying 115,000 shares of American on September 10. Similarly,much of the seemingly suspicious trading in American on September 10 was traced to a specific U.S.-based options trading newsletter, faxed to its subscribers on Sunday, September 9, which recommended these trades. These examples typify the evidence examined by the investigation. The SEC and the FBI,aided by other agencies and the securities industry,devoted enormous resources to investigating this issue,including securing the cooperation of many foreign governments. These investigators have found that the apparently suspicious consistently proved innocuous.Joseph Cella interview (Sept. 16,2003; May 7,2004; May 10-11,2004); FBI briefing (Aug.15,2003); SEC memo,Division of Enforcement to SEC Chair and Commissioners,"Pre-September 11,2001 Trading Review," May 15,2002; Ken Breen interview (Apr.23,2004); Ed G.interview (Feb.3,2004).


Mike Ruppert describes 9/11 insider trading

several articles on the insider trading scandals

Michael C. Ruppert

FTW, October 9, 2001 - Although uniformly ignored by the mainstream U.S. media, there is abundant and clear evidence that a number of transactions in financial markets indicated specific (criminal) foreknowledge of the September 11 attacks on the World Trade Center and the Pentagon. In the case of at least one of these trades -- which has left a $2.5 million prize unclaimed -- 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. ....

(note: most publications refuse to touch this material, one need not defend Larry Flynt's other publications to understand the importance of this interview - no nudity on that page, it is "G" rated)


Krongard and Blackwater

This story was on the New York Times website on Saturday, November 17, 2007:

State IG's Brother Quits Blackwater

Published: November 17, 2007
Filed at 5:34 a.m. ET

WASHINGTON (AP)-- The brother of embattled State Department Inspector General Howard Krongard quit as an adviser to Blackwater Worldwide on Friday, two days after the relationship with the security contractor was sharply criticized by a congressional oversight committee.

Erik Prince, Blackwater's top executive, said the conflict-of-interest questions raised by the connection prompted Alvin ''Buzzy'' Krongard to submit his resignation.

''I have reluctantly accepted it,'' Prince said in a statement.

It's unclear whether the move will salvage Howard Krongard's damaged credibility and career, however. The House Oversight and Government Reform Committee plans to meet in December to determine if Howard Krongard testified truthfully about his brother.

Alvin Krongard never received any payment for his work on Blackwater's advisory board, which only met once, Prince said.

Prince said there are no allegations of impropriety against Alvin Krongard for his membership on Blackwater's board, a group recently created to help the North Carolina-based security company plan future business activities.

Blackwater is a major State Department contractor and the subject of ongoing federal investigations. One of those is examining whether Blackwater guards violated use-of-force rules during a Sept. 16 shooting in Baghdad that left 17 Iraqis dead.

Prince said there is no evidence that Howard Krongard's ability to perform his oversight duties was compromised by Alvin Krongard's relationship with Blackwater.

''The publicized allegation of an 'apparent conflict of interest' against his brother Howard, with whom Buzzy has not been close for years, is just that, an allegation,'' Prince's statement said.

Alvin Krongard's departure from Blackwater's board comes two days after the connection was made public during a hearing by the House Oversight and Government Reform Committee. In sworn testimony Wednesday, Howard Krongard was asked by Democratic members of the committee about his brother's ties to Blackwater, and he angrily said there weren't any.

But when confronted by committee members with evidence Alvin Krongard had joined the board, Howard Krongard called his brother during a hearing break and was told he attended a Blackwater advisory board meeting in Williamsburg, Va., on Monday and Tuesday. Before that conversation, Howard Krongard said he was not aware of the link.

Howard Krongard then told the committee he was recusing himself from any inquires related to Blackwater.

On Thursday, however, Alvin Krongard challenged Howard Krongard's version of events. According to the oversight committee's chairman, Rep. Henry Waxman, D-Calif., Alvin Krongard called the committee and said he had told his brother well before Wednesday's hearing about his decision to become a strategic adviser to Blackwater.

In a move that further escalated the differences, Howard Krongard's attorney on Friday sent Waxman a copy of notes she said Howard Krongard took during an Oct. 31 conversation with his brother. The call was initiated by Howard Krongard and lasted 10 minutes, said attorney Barbara Van Gelder.

''No financial interest whatsoever,'' the notes read, referring to Alvin Krongard's explanation of his status with Blackwater. ''Was on short list for advisory board but not taking it.''

In a side note to himself on the same page, Howard Krongard wrote, ''Why would anybody go on the board now?''

Asked to reconcile the conflicting versions, Van Gelder called the situation ''he said, he said.''

''These discrepancies between the testimony of Howard Krongard and the information from Buzzy Krongard raise questions about the truthfulness of Howard Krongard's testimony,'' Waxman said in a memo delivered Friday to committee members.

The union that represents U.S. diplomats on Friday repeated its call for Krongard to step down.

''We still believe he should step aside temporarily until this issue has been fully resolved by the appropriate bodies,'' said John Naland, president of the American Foreign Service Association.

Waxman said he plans to invite the Krongard brothers to testify at the December hearing.

If both appear, it's likely to be a chilly reunion. They speak rarely.

Alvin Krongard contacted the committee after receiving a letter from Waxman seeking information about his connections to Blackwater and any communication he may have had with Howard Krongard about the company.

Alvin Krongard said he was watching his brother testify on television and heard him say there was no Blackwater connection.

''You could have blown me over,'' Alvin Krongard told the committee, according to Waxman's memo.

Alvin Krongard recounted for the committee the conversation he had with his brother prior to the hearing.

'''He asked me whether I had any financial interest or any ties to Blackwater, and so I told him 'I'm going on their board,''' Alvin Krongard told the committee, according to Waxman's memo. ''He responded by saying, 'Why would you do that?' and 'Are you sure that's a good idea?'''

It was his decision to make, Alvin Krongard told his brother, and ''we just differed on that,'' according to Waxman's memo.

Van Gelder, Howard Krongard's attorney, asked Waxman not to hold the December hearing.

''There is no legitimate legislative purpose to be gained by publicly pitting two brothers against each other,'' she said in a letter to Waxman.

The role of the advisory board is to offer ''leadership advice'' on the paths Blackwater should take to expand its business, according to the company. Prince invited Alvin Krongard to join the board in July.

Expenses for attending board meetings would be covered and board members would receive a $3,500 honorarium for each meeting attended. The money could be paid to them or to a charity of their choice.

In addition to recusing himself from matters related to Blackwater, Howard Krongard also said he is no longer involved in corruption investigations related to the flawed construction of the U.S. Embassy in Baghdad, a $600 million project that is beset by logistical delays and security concerns.


Associated Press writer Matthew Lee contributed to this report.




U.S. Suggests, Without Proof, Stock Adviser Knew of 9/11

Published: May 25, 2002

A San Diego stock adviser who is accused of bribing an F.B.I. agent to give him confidential government information may have had prior knowledge of the Sept. 11 attacks, a federal prosecutor said yesterday. But a judge disregarded that contention and the adviser's lawyer called the allegation ludicrous.

In a court hearing in San Diego, Kenneth Breen, an assistant United States attorney, said the adviser, Amr Ibrahim Elgindy, tried to sell $300,000 in stock on the afternoon of Sept. 10 and told his broker that the stock market would soon plunge. ''Perhaps Mr. Elgindy had preknowledge of Sept. 11, and rather than report it he attempted to profit from it,'' Mr. Breen said.

Mr. Breen, coordinator of the stock market unit of a government task force set up to investigate financing for terrorist groups, offered no other evidence that Mr. Elgindy had prior knowledge of the attacks.

A lawyer for Mr. Elgindy said the allegation appeared to be motivated by the fact that Mr. Elgindy is Muslim and was born in Egypt. Senior F.B.I. officials also said they had no evidence that Mr. Elgindy had prior knowledge of the attacks.

In the hearing yesterday, Mr. Breen asked Judge John A. Houston of Federal District Court in San Diego to hold Mr. Elgindy without bond. Mr. Elgindy, also known as Tony Elgindy and Anthony Pacific, recently moved $700,000 to Lebanon and is a serious flight risk, Mr. Breen said.

Judge Houston disregarded Mr. Breen's claims about Mr. Elgindy and Sept. 11. But the judge said there was enough other evidence that Mr. Elgindy might flee to justify detaining him at least until a June 6 hearing to determine whether he should be moved to New York for a trial.

Jeanne Geren Knight, a lawyer for Mr. Elgindy, said after the hearing that Mr. Breen's allegations were ludicrous and untrue. ''The government, for lack of factual evidence, has decided to smear my client with terrorist innuendoes,'' Ms. Knight said. ''This is smacking of racial profiling.''

Mr. Elgindy and four other people, including one current and one former F.B.I. agent, were charged Wednesday with using confidential government information to manipulate stock prices and extort money from companies. Jeffrey A. Royer, who was an F.B.I. agent before joining Mr. Elgindy's stock advisory firm in December, accepted $30,000 from a partner of Mr. Elgindy's in exchange for providing Mr. Elgindy with information about current criminal investigations of companies, prosecutors allege.

Mr. Elgindy and his partner, Derrick W. Cleveland, sold short the shares of companies that they learned were under investigation, according to the indictment. (Short sellers borrow shares and sell them, hoping to buy them back later at a lower price and pocket the difference.) Then Mr. Elgindy publicized the negative information on two Web sites he ran, hoping that the companies' stocks would fall, prosecutors say.

At the hearing yesterday, Mr. Breen said that on the afternoon of Sept. 10, Mr. Elgindy contacted his broker at Salomon Smith Barney and asked him to sell $300,000 in stock in his children's trust funds. During the Sept. 10 conversation, Mr. Elgindy predicted that the Dow Jones industrial average, which at the time stood at about 9,600, would soon crash to below 3,000, Mr. Breen said. Mr. Elgindy was unable to sell the stock before markets closed Sept. 10, and it was instead sold Sept. 18, the first day that markets reopened for trading after the attacks, Mr. Breen said.

The Salomon Smith Barney broker contacted the F.B.I. after the attacks to report the conversation, Mr. Breen said. He did not identify the broker. A spokesman for Salomon Smith Barney confirmed that Mr. Elgindy was a client but said that Salomon did not comment on matters relating to its clients.

Mr. Elgindy also transferred more than $700,000 to Lebanon in the months after the attacks, Mr. Breen said. When F.B.I. agents raided Mr. Elgindy's home outside San Diego on Wednesday, Mr. Breen said, they found $43,000 in cash, as well as a loose diamond and faxes indicating that Mr. Elgindy had been tipped about the raid and had given his wife a power of attorney to liquidate his assets.

Ms. Knight, Mr. Elgindy's lawyer, denied that Mr. Elgindy had any prior knowledge of the attacks.

Mr. Elgindy's wife is from Louisiana, Ms. Knight said, adding that his mother was a pediatrician and his father a professor. ''Tony isn't political at all,'' she said. ''He's a capitalist. He's not going to move to a third world country.''

Senior law enforcement officials said yesterday that investigators had no hard evidence that Mr. Elgindy had advance information about the Sept. 11 attacks. So far, they have not found anyone who had prior knowledge of the attacks, they said. But they said the investigation into why Mr. Elgindy tried to sell the shares in his children's trust accounts before Sept. 11 had raised questions that had not been fully answered.

Mr. Elgindy has been an active supporter of Muslim causes. In 1999, he arranged to bring 30 Muslim refugees from Kosovo to the United States, according to The Daily Herald of Chicago.

Mr. Elgindy said the violence in Kosovo, Serbia's southern province, appalled him, comparing it to the shootings at Columbine High School in Colorado. ''Take Columbine, have it occur five times a day for a year, and that's Kosovo,'' Mr. Elgindy told The Daily Herald.

Mr. Elgindy's father and brother are also active in Arab and Muslim causes. His father, Ibrahim Elgindy, founded an umbrella group of Muslim organizations in Chicago and led a 1998 protest on behalf of Muhammad A. Salah, whose assets were seized that year after the United States government linked Mr. Salah to Hamas, the radical Palestinian group. Mr. Elgindy's brother, Khaled, has worked for several Arab political groups.

Neither Ibrahim Elgindy nor Khaled Elgindy has ever been linked to terrorism. Khaled Elgindy did not return calls yesterday. Ibrahim Elgindy could not be reached for comment.

Mr. Elgindy himself publicly criticized the Sept. 11 attacks. In a press release that day, his company, Pacific Equity Investigations, said, ''We must seek, find, apprehend and destroy those who are responsible for this terrorist attack.''

Two days later, Mr. Elgindy put out another press release, saying that he had forwarded to the F.B.I. and the Securities and Exchange Commission ''many Internet posts and messages that may have relevance on this tragedy and the capture of the responsible parties behind it.'' He also asked that investors refrain from selling short the stocks of any United States companies or the United States dollar.

Mr. Elgindy sold the shares in his children's trusts five days later.