a big 9/11 conspiracy myth - laid to rest

  1. dub
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    Following is from The Chicago Sun-Times


    No profiteering on terror attacks

    September 19, 2003

    BY DAVID ROEDER Business Reporter Advertisement

    Somewhere out there are hedge funds or individual investors who profited from the Sept. 11, 2001 terrorist attacks. But they had no foreknowledge of the catastrophes, an FBI spokesman said Thursday.

    Spokesman Ed Cogswell said the FBI has closed its investigation of stock and option trading that took place days before the attacks. He said the investigation turned up "absolutely no evidence'' of anyone with inside knowledge of what would happen.

    After the attacks, in which terrorists commandeered planes owned by the two biggest airlines, United and American, traders in the Chicago options market noticed suspicious pre-Sept. 11 spikes in volume. Put options for stocks in the airlines' parent companies, UAL Corp. and AMR Corp., registered huge trading increases in the week before the attacks.

    Investors can use puts, which confer the right to sell a stock at a pre-determined price, to make money when the underlying share price falls, similar to shorting a stock. The terrorist attacks and their effect on the travel industry caused shares of UAL and AMR to fall dramatically when the markets reopened Sept. 17.

    Cogswell said most of the options trading was carried out by hedge funds with bearish outlooks. He did not name any of the funds, which pursue risky investment strategies on behalf of wealthy clients.

    Market regulators in other countries opened similar investigations after the attacks, but Cogswell said he believes all have been concluded with no evidence that allies of Osama bin Laden were involved.

    He said the FBI interviewed trading professionals and other witnesses, sharing its findings with the Justice Department and Securities and Exchange Commission.

    On Sept. 10, 2001, put options on AMR were 17 times their average volume of 269 contracts. On Sept. 6, 2001, UAL put options were traded at more than four times their average volume of 711 contracts.

    At the same time, some experts cautioned that because of the light volume in most option contracts, an increase can seem eye-popping.

    London regulators thought they had something in the short-selling of big airline stocks before Sept. 11, but traced the activity to one of their small competitors.



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