A new academic study has made a shocking and highly controversial finding. Suspicious Israeli stock market activity in the days preceding Operation Al-Aqsa Flood on October 7 indicates that a particular party had foreknowledge of the impending attack and used that information to directly profit from the panic that ensued.
by Kit Klarenberg
Part 3 - ‘Profit From Tragedy’
Exactly who was behind this activity isn’t yet clear from publicly available data. Their identities will nonetheless be known by the U.S. Financial Industry Regulatory Authority and the Securities and Exchange Commission (SEC). The paper’s authors suggest these agencies delve deeper to “[understand] why, and how, financial markets may have anticipated” the events of October 7.
So far, there is no sign of an official probe being launched stateside, although there are precedents for such action. As the paper records, following 9/11, the SEC looked intensively into whether particular “market dynamics” before that fateful day “reflected advance knowledge” of the attacks. Three years later, though, the Commission reported it had not been able to “develop any evidence suggesting that anyone who had advance knowledge of the terrorist attacks…sought to profit from that knowledge.”
The academics add that since then, three separate academic papers have probed the same issue, pointing to very different conclusions. In 2006, University of Chicago professor Allen Poteshman concluded the activity examined by the SEC was “consistent with informed investors having traded…in advance of the attacks.”
So far, there is no sign of an official probe being launched stateside, although there are precedents for such action. As the paper records, following 9/11, the SEC looked intensively into whether particular “market dynamics” before that fateful day “reflected advance knowledge” of the attacks. Three years later, though, the Commission reported it had not been able to “develop any evidence suggesting that anyone who had advance knowledge of the terrorist attacks…sought to profit from that knowledge.”
The academics add that since then, three separate academic papers have probed the same issue, pointing to very different conclusions. In 2006, University of Chicago professor Allen Poteshman concluded the activity examined by the SEC was “consistent with informed investors having traded…in advance of the attacks.”
In 2011, an international study team identified “abnormal trading” indicative of “insiders anticipating the 9/11 attacks.” In 2015, researchers from the University of Zurich confirmed unusual airline, bank, and reinsurer stock trading before 9/11.
The question of whether foreknowledge of the 9/11 attacks motivated insider trading was, at the time, treated with the utmost urgency by Western government officials, regulators, law enforcement, and the media. Open source records showed companies adversely affected by the event were abruptly shorted at record levels in the weeks prior, while investment in stocks that stood to benefit rocketed. On September 10, 2001, the purchase of shares of U.S. weapons manufacturer Raytheon inexplicably soared sixfold. A week later, their value had almost doubled.
The profits involved both ways were huge. As a contemporary mainstream report notes, five days before 9/11, over 2,000 short bets totaling $180,000 were made against United Airlines – ninety times more in a single day than in the prior three weeks. The company’s stock collapsed once the World Trade Center was struck, and the value of that investment skyrocketed to $2.4 million. This was just one example of suspicious activity among many investigated by U.S. authorities.
The question of whether foreknowledge of the 9/11 attacks motivated insider trading was, at the time, treated with the utmost urgency by Western government officials, regulators, law enforcement, and the media. Open source records showed companies adversely affected by the event were abruptly shorted at record levels in the weeks prior, while investment in stocks that stood to benefit rocketed. On September 10, 2001, the purchase of shares of U.S. weapons manufacturer Raytheon inexplicably soared sixfold. A week later, their value had almost doubled.
The profits involved both ways were huge. As a contemporary mainstream report notes, five days before 9/11, over 2,000 short bets totaling $180,000 were made against United Airlines – ninety times more in a single day than in the prior three weeks. The company’s stock collapsed once the World Trade Center was struck, and the value of that investment skyrocketed to $2.4 million. This was just one example of suspicious activity among many investigated by U.S. authorities.
Elsewhere, probes into the matter were launched in several European countries and seemingly produced quick results. On September 24 that year, Belgium’s finance minister said investigations had already led to “strong suspicions that British markets may have been used” for insider trading pre-9/11. The same day, Germany’s central bank president forcefully declared, “What we found makes us sure that people connected to the terrorists must have been trying to profit from this tragedy.”
Yet, like the SEC’s, these investigations ultimately failed to produce results. The 9/11 Commission report summarily dismissed the issue altogether on the perplexing grounds that individuals identified as responsible for the trades “had no conceivable ties to Al Qaeda.” A declassified 2003 FBI document assessing suspicious pre-9/11 trades reveals who at least two of these investors were while providing a likely explanation for why authorities did not aggressively pursue the issue.
One of the trades examined by the Bureau was the purchase of 56,000 shares of Stratesec between September 6 and September 10, 2001. The company provided security systems to airports, including New York City’s Dulles, from where one of the hijacked planes departed, United Airlines, which suffered two hijackings on 9/11, and the World Trade Center. Its share price almost doubled following the attacks.
Yet, like the SEC’s, these investigations ultimately failed to produce results. The 9/11 Commission report summarily dismissed the issue altogether on the perplexing grounds that individuals identified as responsible for the trades “had no conceivable ties to Al Qaeda.” A declassified 2003 FBI document assessing suspicious pre-9/11 trades reveals who at least two of these investors were while providing a likely explanation for why authorities did not aggressively pursue the issue.
One of the trades examined by the Bureau was the purchase of 56,000 shares of Stratesec between September 6 and September 10, 2001. The company provided security systems to airports, including New York City’s Dulles, from where one of the hijacked planes departed, United Airlines, which suffered two hijackings on 9/11, and the World Trade Center. Its share price almost doubled following the attacks.
The trades traced back to Wirt D. Walker III, a distant relative of the Bush family and business partner of Marvin Bush, then-President George W. Bush’s brother. According to the declassified file, the FBI never bothered to interview him about the trades, ostensibly as their background investigation revealed “no ties to terrorism or other negative information.”
Comments
Post a Comment