CIA
CRIMINAL INSIDER TRADING
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SUPPRESED DETAILS OF CRIMINAL INSIDER TRADING
LEAD DIRECTLY INTO THE CIA’s HIGHEST RANKS
CIA EXECUTIVE DIRECTOR “BUZZY” KRONGARD MANAGED
FIRM THAT HANDLED “PUT” OPTIONS ON UAL
by Michael C. Ruppert
[© COPYRIGHT, 2001, Michael C. Ruppert and FTW
Publications, www.copvcia.com.
All Rights Reserved. – May be reprinted or distributed for non-profit
purposes only.]
FTW, October 9, 2001 – Although uniformly
ignored by the mainstream U.S. media, there is abundant and clear evidence
that a number of transactions in financial markets indicated specific
(criminal) foreknowledge of the September 11 attacks on the World Trade
Center and the Pentagon. In the case of at least one of these trades
-- which has left a $2.5 million prize unclaimed -- the firm used to
place the “put options” on United Airlines stock was, until
1998, managed by the man who is now in the number three Executive Director
position at the Central Intelligence Agency. Until 1997 A.B. “Buzzy”
Krongard had been Chairman of the investment bank A.B. Brown. A.B. Brown
was acquired by Banker’s Trust in 1997. Krongard then became, as
part of the merger, Vice Chairman of Banker’s Trust-AB Brown, one
of 20 major U.S. banks named by Senator Carl Levin this year as being
connected to money laundering. Krongard’s last position at Banker’s
Trust (BT) was to oversee “private client relations.” In this
capacity he had direct hands-on relations with some of the wealthiest
people in the world in a kind of specialized banking operation that
has been identified by the U.S. Senate and other investigators as being
closely connected to the laundering of drug money.
Krongard (re?) joined
the CIA in 1998 as counsel to CIA Director George Tenet. He was promoted
to CIA Executive Director by President Bush in March of this year. BT
was acquired by Deutsche Bank in 1999. The combined firm is the single
largest bank in Europe. And, as we shall see, Deutsche Bank played
several key roles in events connected to the September 11 attacks.
THE
SCOPE OF KNOWN INSIDER TRADING
Before looking further into these relationships it is necessary
to look at the insider trading information that is being ignored by
Reuters, The New York Times and other mass media. It is well documented
that the CIA has long monitored such trades – in real time –
as potential warnings of terrorist attacks and other economic moves
contrary to U.S. interests. Previous stories in FTW have
specifically highlighted the use of Promis software to monitor such
trades.
It is necessary to understand only two key financial terms
to understand the significance of these trades, “selling short”
and “put options”.
“Selling Short” is the borrowing of stock, selling
it at current market prices, but not being required to actually produce
the stock for some time. If the stock falls precipitously after the
short contract is entered, the seller can then fulfill the contract
by buying the stock after the price has fallen and complete the contract
at the pre-crash price. These contracts often have a window of as long
as four months.
“Put Options,” are contracts giving the buyer the
option to sell stocks at a later date. Purchased at nominal prices of,
for example, $1.00 per share, they are sold in blocks of 100 shares.
If exercised, they give the holder the option of selling selected stocks
at a future date at a price set when the contract is issued. Thus, for
an investment of $10,000 it might be possible to tie up 10,000 shares
of United or American Airlines at $100 per share, and the seller of
the option is then obligated to buy them if the option is executed.
If the stock has fallen to $50 when the contract matures, the holder
of the option can purchase the shares for $50 and immediately sell them
for $100 – regardless of where the market then stands. A call option
is the reverse of a put option, which is, in effect, a derivatives bet
that the stock price will go up.
A September 21 story by the Israeli Herzliyya International
Policy Institute for Counterterrorism, entitled “Black Tuesday:
The World’s Largest Insider Trading Scam?” documented the
following trades connected to the September 11 attacks:
- Between September 6 and 7, the Chicago Board Options Exchange saw purchases
of 4,744 put options on United Airlines, but only 396 call options…
Assuming that 4,000 of the options were bought by people with advance
knowledge of the imminent attacks, these “insiders” would
have profited by almost $5 million.
- On September 10, 4,516 put options on American Airlines were bought on
the Chicago exchange, compared to only 748 calls. Again, there was no
news at that point to justify this imbalance;… Again, assuming
that 4,000 of these options trades represent “insiders,” they
would represent a gain of about $4 million.
- [The levels of put options purchased above were more than six times higher
than normal.]
- No
similar trading in other airlines occurred on the Chicago exchange in
the days immediately preceding Black Tuesday.
- Morgan Stanley Dean Witter & Co., which occupied 22 floors of the World
Trade Center, saw 2,157 of its October $45 put options bought in the
three trading days before Black Tuesday; this compares to an average
of 27 contracts per day before September 6. Morgan Stanley’s share
price fell from $48.90 to $42.50 in the aftermath of the attacks. Assuming
that 2,000 of these options contracts were bought based upon knowledge
of the approaching attacks, their purchasers could have profited by
at least $1.2 million.
- Merrill Lynch & Co., which occupied 22 floors of the World Trade Center,
saw 12,215 October $45 put options bought in the four trading days before
the attacks; the previous average volume in those shares had been 252
contracts per day [a
1200% increase!]. When trading resumed, Merrill’s shares fell
from $46.88 to $41.50; assuming that 11,000 option contracts were bought
by “insiders,” their profit would have been about $5.5 million.
- European regulators are examining trades
in Germany’s Munich Re, Switzerland’s Swiss Re, and AXA of
France, all major reinsurers with exposure to the Black Tuesday disaster.
[FTW Note: AXA also owns more than 25% of American Airlines
stock making the attacks a “double whammy” for them.]
On September 29, 2001 – in a vital story that has gone
unnoticed by the major media – the San Francisco Chronicle reported,
“Investors have yet to collect more than $2.5 million in profits
they made trading options in the stock of United Airlines before the
Sept. 11, terrorist attacks, according to a source familiar with the
trades and market data.
“The uncollected money raises suspicions that the investors
– whose identities and nationalities have not been made public
– had advance knowledge of the strikes.” They don’t dare show up now.
The suspension of trading for four days after the attacks made it impossible
to cash-out quickly and claim the prize before investigators started
looking.
“… October series options for UAL Corp. were purchased
in highly unusual volumes three trading days before the terrorist attacks
for a total outlay of $2,070; investors bought the option contracts,
each representing 100 shares, for 90 cents each. [This represents 230,000 shares].
Those options are now selling at more than $12 each. There are still
2,313 so-called “put” options outstanding [valued at $2.77
million and representing 231,300 shares] according to the Options
Clearinghouse Corp.”
“…The source familiar with the United trades identified
Deutsche Bank Alex. Brown, the American investment banking arm of German
giant Deutsche Bank, as the investment bank used to purchase at least
some of these options…” This was the operation managed by Krongard until as
recently as 1998.
As reported in other news stories, Deutsche Bank was also the
hub of insider trading activity connected to Munich Re. just before
the attacks.
CIA,
THE BANKS AND THE BROKERS
Understanding the interrelationships between CIA and the banking
and brokerage world is critical to grasping the already frightening
implications of the above revelations. Let’s look at the history
of CIA, Wall Street and the big banks by looking at some of the key
players in CIA’s history.
Clark Clifford – The National Security Act of
1947 was written by Clark Clifford, a Democratic Party powerhouse, former
Secretary of Defense, and one-time advisor to President Harry Truman.
In the 1980s, as Chairman of First American Bancshares, Clifford was
instrumental in getting the corrupt CIA drug bank BCCI a license to
operate on American shores. His profession: Wall Street lawyer and banker.
John Foster and Allen Dulles – These two brothers “designed”
the CIA for Clifford. Both were active in intelligence operations during
WW II. Allen Dulles was the U.S. Ambassador to Switzerland where he
met frequently with Nazi leaders and looked after U.S. investments in
Germany. John Foster went on to become Secretary of State under Dwight
Eisenhower and Allen went on to serve as CIA Director under Eisenhower
and was later fired by JFK. Their professions: partners in the most
powerful - to this day - Wall Street law firm of Sullivan, Cromwell.
Bill Casey – Ronald Reagan’s CIA Director
and OSS veteran who served as chief wrangler during the Iran-Contra
years was, under President Richard Nixon, Chairman of the Securities
and Exchange Commission. His profession: Wall Street lawyer and stockbroker.
David Doherty - The current Vice President of the
New York Stock Exchange for enforcement is the retired General Counsel
of the Central Intelligence Agency.
George Herbert Walker Bush – President from 1989 to January
1993, also served as CIA Director for 13 months from 1976-7. He is now
a paid consultant to the Carlyle Group, the 11th largest
defense contractor in the nation, which also shares joint investments
with the bin Laden family.
A.B. “Buzzy” Krongard – The current Executive Director
of the Central Intelligence Agency is the former Chairman of the investment
bank A.B. Brown and former Vice Chairman of Banker’s Trust.
John Deutch - This retired CIA Director from the
Clinton Administration currently sits on the board at Citigroup, the
nation’s second largest bank, which has been repeatedly and overtly
involved in the documented laundering of drug money. This includes Citigroup’s
2001 purchase of a Mexican bank known to launder drug money, Banamex.
Nora Slatkin – This retired CIA Executive
Director also sits on Citibank’s board.
Maurice “Hank” Greenburg – The CEO of AIG insurance, manager
of the third largest capital investment pool in the world, was floated
as a possible CIA Director in 1995. FTW exposed Greenberg’s
and AIG’s long connection to CIA drug trafficking and covert operations
in a two-part series that was interrupted just prior to the attacks
of September 11. AIG’s stock has bounced back remarkably well since
the attacks. To read that story, please go to http://www.copvcia.com/stories/part_2.html.
One wonders how much damning evidence is necessary to respond
to what is now irrefutable proof that CIA knew about the attacks and
did not stop them. Whatever our government is doing, whatever the CIA
is doing, it is clearly NOT in the interests of the American people,
especially those who died on September 11.
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