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Context of 'April 25, 2004: Academic Paper Determines 9/11 Insider Trading Not Due to Chance'

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CIA covert Operation PB Success successfully removes Guatemalan leader Arbenz from power. (Gleijeses 1992; Central Intelligence Agency 1994; Doyle and Kornbluh 1997; Hunt 10/1997; Woodward 1999; Woodward 1999; Schlesinger and Kinzer 1999) The CIA director at this time, Allen Dulles, was formerly the president of the United Fruit Fruit Company (UFCO) and the previous CIA director and under-secretary of state, General Walter Bedell Smith, is on the company’s board of directors. Smith will become UFCO’s president following the overthrow. (Blum 1995) Allen Dulles’ brother, John Dulles, who is Secretary of State, previously worked as a lawyer defending the United Fruit Company. (Ginsberg 1996; CNN 2/21/1999)

A company called SCT attempts to purchase Inslaw, which designed the PROMIS database and search application. SCT is assisted by the New York investment bank Allen & Co., which helps with the finance for the proposed deal. The attempt fails, but, according to Inslaw’s founder William Hamilton, in the process a number of Inslaw’s customers are warned by SCT that Inslaw will soon go bankrupt and will not survive reorganization. Wired magazine will say that Allen & Co. has “close business ties” to Earl Brian, a businessman who is said to be interested in PROMIS software and who is well-connected inside the Ronald Reagan administration. (Fricker 3/1993)

Spokesperson Paul Bresson announces that the FBI has concluded that there was no insider trading in US securities markets by people with advance knowledge of the 9/11 attacks. According to Bresson, the “vast majority” of a pre-attack surge of trading in options that bet on a drop in the stock of AMR Corp., which owns American Airlines, and UAL Corp., which owns United Airlines, was conducted by investment hedge funds implementing bearish investment strategies or hedging a line position of common stock, and was not linked to terrorists. (9/11 Commission 8/18/2003 pdf file; St. Petersburg Times 9/19/2003; Washington Post 9/19/2003) However, seven months later, a paper by a professor of finance at the University of Illinois will conclude that “there is evidence of unusual option market activity in the days leading up to September 11” (see April 25, 2004). (Poteshman 3/10/2004)

Allen Poteshman, a professor of finance at the University of Illinois, publishes a paper demonstrating that the insider trading in options on United and American airline stocks indicates someone profited from foreknowledge of 9/11. Poteshman concludes, “There is evidence of unusual option market activity in the days leading up to September 11.” (Poteshman 3/10/2004; Barnhart 4/25/2004)


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