PROFITS OF DEATH
-- INSIDER TRADING AND 9-11
Tom Flocco - Edited by
Michael C. Ruppert
[© Copyright 2001. From
The Wilderness Publications, www.copvcia.com. All Rights Reserved. May be
recopied, distributed or posted on the worldwide web for
non-profit purposes only.]
FTW, December 6, 2001 -- On
October 9th, FTW broke a story on insider trading connected
to the 9-11 attacks on the World Trade Center that sparked
worldwide controversy. In that story we reported how the
Israeli Herzliyya Institute for Counterterrorism had documented
that unknown individuals -- with accurate foreknowledge
of the attacks -- had purchased an obvious and unusually
large number of "put" options on United and American Airlines
shortly before the attacks.
hit hard by the insider trading included Axa Re(insurance)
and Munich Re as well as American investment giants Merrill
Lynch and Morgan Stanley.
Put options are essentially
a bet that a stock's price will fall abruptly. The seller,
having entered into a time-specific contract with a buyer,
does not need to own the actual shares at the time the contract
is purchased. Therefore, if a holder of the put option has
a contract to sell a stock such as American Airlines for
(e.g.) $100 a share on a Friday and the stock falls to $50
on Wednesday, they can purchase the stock, sell it on Friday
and double their money. The person on the other end of the
contract (the call) has an obligation to buy the shares
at the agreed upon price. The bank handling the transaction
as a broker is the only entity knowing the identities of
FTW also revealed that
the A.B. Brown (Alex Brown) investment arm of the banking
giant Deutschebank/A.B. Brown had been headed until 1998
by the man who is now the Executive Director of the Central
Intelligence Agency - A.B. "Buzzy" Krongard. In fact, Krongard
is but one name in a long history of CIA interconnections
to stock trading and the world's financial markets. We also
discussed, in detail, the evidence indicating that the CIA
and other intelligence agencies monitor stock trading in
real time for the purpose of identifying potential attacks
of any nature that might damage the U.S. economy.
The original FTW story
is located at:
Critics of FTW's initial
story - not having read any of five related stories dating
back to an October 2000 piece on PROMIS software - claimed
that we had not made the links to establish culpability.
But we knew that the links were there, that our case was
solid, and that new evidence would not go undiscovered for
reporter Tom Flocco digs deep and strikes pay dirt in a
three-part series that reveals not only deeper links between
the CIA, Wall Street and the insider trades of 9-11, but
also discloses that a key executive at Deutschebank - an
American - became, just weeks before the attacks, a convicted
felon. His crime: conspiracy to launder drug money to arrange
the purchase of U.S. weapons - in association with two Pakistanis
who also attempted to acquire nuclear bomb components -
for use by Islamic fundamentalist terrorists. - MCR
Not Deny Stock Monitoring Outside U.S.
(Part I in a series)
In a returned
phone call from the Central Intelligence Agency, press spokesman
Tom Crispell denied that the CIA was monitoring "real-time,"
pre-September 11, stock option trading activity within United
States borders using such software as the Prosecutor's Management
Information System (PROMIS).
be illegal. We only operate outside the United States,"
the intelligence official said.
However, when asked
whether the CIA had been using PROMIS beyond American borders
to scrutinize world financial markets for national security
purposes, Crispell replied, "I have no way of knowing
what operations are [being affected by our assets] outside
Extensive media reporting
confirms that investors at Deutschebank-Alex Brown and other
global financial entities may have profited from prior knowledge
of the attacks while purchasing disproportionate pre-attack
put option contracts on targeted U.S. airlines and related
insurance or investment firms. All of these firms suffered
serious losses resulting from the September 11th attacks
and their stocks abruptly plummeted.
the CIA or other U.S. intelligence agencies were monitoring
financial markets and had seen these trades before the attacks
would have staggering implications for thousands of victims'
The CIA official
also declined to comment on the actual capabilities of PROMIS.
The highly technical software has been described as
a system that "interfaces with any database...as police
can input an alleged terrorist's name or credit card, and
the software will provide details of the person's movements
through purchases...," according to an 11-10-01 Toronto
The importance of
PROMIS is that it is not only capable of interfacing with
a wide variety of data bases in different computer languages
and then integrating the data, but it has also been modified
for intelligence purposes. It has then been sold throughout
the world by spy agencies through third parties to clients
such as banks and investment houses envious of its unique
capabilities. One key modification by agencies such as the
CIA and Mossad - not disclosed to most users -- is a secret
"back door" that permits those with the right codes to enter
databases undetected, retrieve and/or alter information,
and leave without a trace. PROMIS has been extensively reported
as being used throughout the world's financial markets because
of its versatility in facilitating international transactions.
the issue of pre-attack stock screening by U.S. intelligence,
the Canadian daily revealed that U.S. police said many of
the suspected terrorists were apprehended (and detained)
"through use of the state-of-the-art computer software
In March 2000, CIA
director George J. Tenet told the Senate that Osama bin
Laden's group (Al Q'aeda) was "embracing the opportunities
offered by recent leaps in information technology."
A FOX News story and stories in FTW disclosed in November
that Osama bin Laden was believed to have the software.
The issue of
CIA monitoring of stock trades follows on the heels of wide
reports indicating that investigators are carefully probing
the insider trading with its resultant profits, reported
to be in the 10's of millions of dollars -- some of which
a Deutschebank investor has yet to claim.
is a promis
declined comment when asked whether the Treasury Department
or FBI had questioned CIA Executive Director and former
Deutschebank-Alex Brown CEO, A.B. "Buzzy" Krongard,
about CIA monitoring of financial markets using PROMIS and
his former position as overseer of Brown's "private
client" relations. [Note: Krongard stayed with A.B. Brown
to head "private client" operations after it was acquired
by Banker's Trust in 1997. As Krongard was leaving in 1998
to join the CIA as counselor to Director George Tenet, Banker's
Trust was acquired by Deutschebank. Banker's Trust had been
previously criticized by the U.S. Senate and regulators
for money laundering. Krongard was promoted to Executive
Director at CIA in March 2001. - MCR]
Wide reports -- including
a 9/28/01 story in the Asian Wall Street Journal and a 10/1/01
story in The Guardian -- indicate that investigators are
checking Deutschebank's alleged links to Saudi "private
banking," terrorist bank accounts, and $2.5 million
in unclaimed United Airlines (UAL) put options profits;
however, no government acknowledgement had ever been given
of CIA's alleged use of PROMIS software prior to the attacks.
In a recent phone
conversation, when asked about alleged terrorist ties to
Deutschebank and potential pre-attack CIA trade monitoring
via PROMIS, Treasury Department spokesman Rob Nichols remarked,
"This is clearly an interesting line of questioning
regarding conflicts of interest."
However, news searches
indicate that no member of Congress has publicly questioned
whether wealthy terrorist-connected Saudi nationals participated
in the private client operations of Deutschebank-Alex Brown.
Osama bin Laden and almost all of the alleged 9-11 hijackers
are of Saudi nationality. Also, no member of Congress expressed
public interest in asking Krongard about whether or not
the CIA affected "real-time" pre-attack trade
monitoring using PROMIS software at any location.
[Note: Under a program
known as Echelon, the governments of the U.S., Britain,
Canada, Australia and New Zealand routinely circumvent prohibitions
on domestic electronic spying by having the agencies of
the other governments do it for them. - MCR]
editor and publisher of From The Wilderness (FTW) newsletter
has been interviewed by both the House and Senate for his
expertise on illegal covert CIA operations. He said recently
that, "It is well documented that the CIA has long
monitored such (suspicious or unusual) trades -- in real
time -- as potential warnings of terrorist attacks and other
economic moves contrary to U.S. interests."
Ruppert was the first
to point out after 9-11 that CIA Executive Director Buzzy
Krongard has extensive past ties to Deutschebank-Alex Brown.
Ruppert added, "There is abundant and clear evidence
that a number of transactions in financial markets indicated
specific [criminal] foreknowledge of the September 11 attacks...and
the firm which was used to place put options on UAL stock
was, until 1998, managed by the man who is now in the number
three position at the CIA."
Ruppert also confirmed
that two October 17 calls to the FBI resulted in spokespersons
declining to give their names after revealing that "the
FBI has discontinued use of the PROMIS software." Moreover,
on October 24, Justice Department spokesperson Loren Pfeifle
declined to answer any questions about where, when, or how
PROMIS had been used and would only say, "I can confirm
that the DOJ has discontinued use of the program."
This followed almost 17 years of denials by the FBI and
the Department of Justice -- in court and under oath --
that they used the software at all in a law enforcement
or intelligence capacity.
lofty intelligence community position, combined with his
prior leadership of a financial institution allegedly connected
to terrorist hijacker bank accounts [see
Part II], suspicious
UAL options contracts, and "private banking" is
so controversial that it has not as yet sparked any official
investigation. That said, the evidence is substantial enough
to potentially expose the prior-knowledge issue -- if Congress
chooses to act.
And while Treasury
Department official Rob Nichols agreed that unresolved conflict
of interest questions remain, the CIA Executive Director
is still currently charged with supervision of the U.S.
intelligence investigation of his former firm and its "private
Reuters has reported
that Krongard "was [also] involved in setting up the
CIA experiment into investing in high-tech companies with
the goal of acquiring innovative technology for its own
Commenting on the
CIA's venture capital firm In-Q-Tel, started in 1999 to
encourage development of private-sector technologies for
use in the intelligence world, Krongard said on August 1,
2001 -- just 5 weeks before the Trade Center attacks --
"I think In-Q-Tel's a wonderful model...in accessing
the capabilities of the private sector."
On October 16, Fox
News reported that, according to sources, accused Russian
spy and FBI agent Robert Hanssen sold high-tech PROMIS software
to Russia, and that Osama bin Laden allegedly purchased
it from Russian organized crime sources.
Fox reported that,
"Government officials suspect bin Laden may have the
highly sophisticated U.S. government software that has been
used by several other governments, including the United
States, for classified intelligence and law enforcement
by U.S. government officials that PROMIS was widely used
by a number of governments further blurs the pre-attack
stock monitoring issue since intelligence officials will
likely continue to decline comment, save for closed-door
congressional oversight hearings or challenges by those
victims' families choosing to bypass settlements adjudicated
by the Attorney General's office in favor of direct intervention
by the courts.
the CIA official, was cooperative while attempting to maintain
intelligence confidentiality in the face of what he termed
as "ongoing investigations surrounding the Twin Towers
tragedies by the CIA, FBI, Justice, and Treasury Departments."
However, this was in great contrast to an FBI spokesperson
who refused to offer either his first or last name, while
declining comment on any matter related to events of September
During a series of
calls, some spokespersons quickly attempted to defer and
deflect questions to another government agency, i.e. "We
don't deal with that issue. Call the other [entity]."
However, many would
agree, given the evidence, that the 9-11 terrorism is closely
linked to economic issues. President Bush has stated that
this is "economic warfare." Yet few appear to be questioning
an apparent paucity of critical information sharing among
key government agencies on the issue.
As U.S. investigators
retrace the financial trails connecting the Twin Towers,
terrorist hijackers and their accomplices, many of whom
may still be in the country, evidence is being turned up
by FBI, CIA, Justice, Treasury and NSA that does involve
global banking conglomerate Deutschebank-Alex Brown.
UAL investor profits
For example, according
to a 10-19-2001 Wall Street Journal report, an unnamed investor
purchased 2,000 United Airlines (UAL) put option contracts
through Deutsche Bank-Alex Brown on September 6 -- betting
the stock would shortly plummet. And USA Today reported
that an individual purchased 810 UAL puts on August 6.
A Baron's source
claimed on 10-8-2001 that the pre-attack UAL order placed
through Deutsche Bank was for 2,500 contracts which were
"split into 500 chunks each, directing each order to
different U.S. exchanges around the country simultaneously."
According to San
Francisco Chronicle reporters Christian Berthelsen and Scott
Winokur a source familiar with the UAL trades said investors
have yet to claim $2.5 million in profits on contracts purchased
before United airliners crashed into a New York Trade Tower
and a deserted Pennsylvania field on September 11.
The Chronicle source
also identified Deutschebank-Alex Brown as the investment
firm used to purchase some of the UAL options; and Rohini
Pragasam, a bank spokeswoman, declined to comment on the
The source (who requested
anonymity) said, "Usually, if someone has a windfall
like that, you take the money and run. Whoever did
this thought the Exchange [NYSE] would not be closed for
four days. This smells real bad."
The German news weekly
Der Spiegel revealed that Deutschebank also handled accounts
worth about $100 million for Osama bin Laden's family. These
were part of 10 accounts it suspected were linked to terrorists
or terrorist activities and which it later handed over to
German authorities after the attacks, according to a report
in Britain's The Guardian. But no further comments have
been forthcoming from the financial giant.
Bank President Ernst Welteke said a study -- concerning
principal hijack subjects residing in Germany and unusual
patterns in short-selling of insurance, airline and other
financial company shares -- pointed to "terrorism insider
trading" in those stocks.
A phone interview
with Securities and Exchange Commission (SEC) press spokesman
John Nester, of the Washington, DC office, revealed that
the Commission, "has already forwarded a general request
to Deutschebank-Alex Brown and other investment firms for
unspecified information related to the suspicious put option
contracts placed prior to the attacks on the Trade Towers
and the Pentagon." But the spokesman declined comment
regarding the identities of complying banks or the contents
of any information obtained.
his response by adding that "according to SEC Associate
Director of Enforcement Bill Baker -- who just spoke on
a panel outside New York last week -- our SEC probe is much
broader than investigations made by countries in Europe
(who also lost citizens), many of whom have already closed
their financial investigations of investment banks like
Deutschebank." No results of those probes have been
While the SEC media
director said "the investigation is still ongoing with
no current conclusions," Nester (speaking for the SEC),
had difficulty explaining the job description of current
New York Stock Exchange (NYSE) Executive Vice President
for Enforcement, David P. Doherty. He would only say that
the NYSE "regulates itself as an SRO or self-regulating
organization...." This vague answer is all the more
provocative because Doherty is a retired General Counsel
of the Central Intelligence Agency.
Nester added, "The
SEC has oversight responsibility regarding the NYSE, and
we are also working with Justice, Treasury, and the FBI,
having set up professional point men at each firm we are
looking at -- so we don't have to reinvent the wheel every
time we call a company [related to the attacks] to get an
answer to a question."
the wheel" statement raised an eyebrow regarding the
level of corporate cooperation in the investigation, although
Nester declined to add further comment.
of CIA Ties the NYSE Is Little Help
about the status of the investigation into the disproportionate
pre-attack stock option trades involving United and American
Airlines, Merrill Lynch, Marsh and McLennan Insurance, Morgan
Stanley, Citigroup, Bear Stearns, and American Express,
etc. -- all icons of American capitalism -- NYSE Communications
Director Ray Pellecchia said, "We don't even confirm
that there is an ongoing investigation."
"We report to
the SEC as a matter of course," Pellecchia added. But
after being referred to as a "persistent piece of work,"
this writer asked Pellecchia to discuss Doherty's role in
the investigations. He said, "We stand by this
And after pressing
for information about what the NYSE is actually doing to
investigate the suspicious trades on behalf of thousands
of victims' families who may be concerned about the "prior-knowledge"
issue, Pellecchia still declined to confirm that Doherty's
enforcement office had even sent a report to the SEC.
When asked why so
many former key CIA executives currently hold, or have held
in the past, top level executive management positions connected
in some way to the stock market via either the SEC, NYSE,
or other investment banking entities, Pellecchia replied
tersely, "I am quite aware of Mr. Doherty's background
also declined to discuss anything related to current CIA
Executive Director A.B. "Buzzy" Krongard and his
past relationship with Alex Brown.
as to who will ultimately take center stage in investigating
conflicts of interest or the real-time monitoring of world
financial markets by U.S. intelligence entities to protect
national security; let alone terrorist ties to wealthy Saudi
private clients at global financial institutions having
direct access (via correspondent banking relationships)
to U.S. banks.
For while thousands
of American families, victimized by terrorism, still remain
numb with grief, information is being advanced daily regarding
what could be described by some as casual, if not negligent,
long-term, slipshod governmental responsiveness to fundamental
internal national security and safety questions -- or worse.
is a freelance writer and researcher.