September 11 Attacks Advance-knowledge Conspiracy Theories - Insider Trading

Insider Trading

The Times reported on September 18 that investigations were under way into the unusually large numbers of shares in insurance companies and airlines sold off before the attack, in the UK, Italy, Germany, Japan, Switzerland, France and the US. News accounts in the weeks that followed reported a notable pattern of trading in the options of United and American Airlines as well as Morgan Stanley and other market activity. An article published in The Journal of Business in 2006 provides statistical evidence of unusual put option market activity days before 9/11:

Examination of the option trading leading up to September 11 reveals that there was an unusually high level of put buying. This finding is consistent with informed investors having traded options before the attacks.

In a statement to the 9/11 Commission in 2003, Mindy Kleinberg, of the 9/11 Family Steering Committee, said:

Never before on the Chicago Exchange were such large amounts of United and American Airlines options traded. These investors netted a profit of at least $5 million after the September 11 attacks. Interestingly, the names of the investors remain undisclosed and the $5 million remains unclaimed in the Chicago Exchange account.

Regarding these trades, the 9/11 Commission found no malfeasance:

A single U.S.-based institutional investor with no conceivable ties to al Qaeda purchased 95% 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... 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, that recommended these trades.

WTC hard drive restoration operation

In December 2001 and early 2002, there was extensive media coverage of the efforts by the German data retrieval company Convar to reconstruct, using laser scanning technology, data from damaged hard drives recovered from the WTC as part of the investigation into a surge in financial transactions just before the two hijacked planes crashed into New York's World Trade Center. The company's CEO, Peter Henschel, noting that the investigation was being conducted for a number of U.S. based clients cooperating with the FBI, said that there was suspicion that criminals had used inside knowledge about the attacks to make and authorize financial transactions during the chaos. According to Convar's data retrieval expert Richard Wagner, criminal transactions in excess of 100 million dollars could have been made in the hope that their trail would have disappeared as a result of the destruction of the WTC mainframe computers. As reported by the Heute Journal, a news programme by the German ZDF TV channel, by March 2002 Convar had been able to restore several hundred hard drives from the WTC.

However, the 9/11 Commission, in a memorandum entitled "FBI Briefing on Trading" dated October 18, 2003, said that when asked about the media coverage of the hard drive restoration operation, the "assembled agents expressed no knowledge of the reported hard-drive recovery effort", further noting that one New York agent argued that it was "extremely unlikely that any hard-drives survived to the extent that they data be recovered."

Later research

The papers of several finance researchers also suggest that some profited from foreknowledge of 9/11. In 2006, Allen Poteshman, a professor of Finance from the University of Illinois, published an analysis of the airline stock option trades preceding the attacks. This peer-reviewed study, published by the University of Chicago Press, came to the conclusion that an indicator of long put volume was "unusually high which is consistent with informed investors having traded in the option market in advance of the attacks". In January 2010, a team of Swiss financial experts published evidence for at least thirteen informed trades in which the investors had apparent foreknowledge of the attacks. Finally, in April 2010, an international team of experts showed that there was a significant abnormal increase in trading volume in the option market just before the 9/11 attacks in contrast to the absence of abnormal trading volume over periods long before the attacks, concluding that their findings were "consistent with insiders anticipating the 9-11 attacks".