Terrorists May Have Attempted To Profit From A Drop In Airline Stocks After The Four Hijackings

Terrorists May Have Attempted To Profit From A Drop In Airline Stocks After The Four Hijackings

CBS News
September 19, 2001

SUSAN McGINNIS, anchor: Federal investigators are following a money trail, trying to find out if terrorists profited from stock swings blamed on the suicide attacks. Sharyl Attkisson reports.

SHARYL ATTKISSON reporting:

Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the US stock options market, an extraordinary number of trades betting that American Airlines' stock price would fall. The trades are called `puts,' and they involved at least 450,000 shares of American. But what raised the red flag is more than 80 percent of the orders were puts, far outnumbering call options, those betting the stock would rise. Sources say they've never seen that kind of imbalance before. Normally, the numbers are fairly even.

After the terrorist attacks, American Airlines' stock price obviously did fall,, and according to our sources, that translated into well over $5 million total profit for the person or persons who bet the stock would fall. Sources tell "60 Minutes" that the initial options were bought through at least two brokerage firms including, including NFS, a subsidiary of Fidelity, and TD Waterhouse, a discount firm. At least one Wall Street firm reported suspicions about this activity to the Securities and Exchange Commission shortly after the attack.

The same thing happened with United Airlines on the Chicago Board Options Exchange four days before the attack. An extremely imbalanced number of trades betting United's stock price would fall also transformed into huge profits.

Mr. RANDALL DODD (Economic Strategy Institute): We can directly work backwards from the trade on the floor of the Chicago Boards Option Exchange. That trader is linked to a brokerage firm. That brokerage firm received the order to buy that put option from either someone within their own brokerage firm speculating or from one of their customers.

ATTKISSON: Now US investigators want to know whether Osama bin Laden was the ultimate inside trader, profiting from a tragedy he's suspected of masterminding to finance his operation. Authorities are also investigating possibly suspicious trading in Germany, Switzerland, Italy and Japan.

The stock trail could stop at the water's edge if the money came from banks in places that don't cooperate with the US. But insider trading is always motivated by greed, and a senior Wall Street executive noted it would be ironic if the terrorists' greed ended up providing one of the best leads investigators have. Sharyl Attkisson, CBS News, Washington.

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