!! History Commons Alert, Exciting News

Context of 'September 6-10, 2001: Suspicious Trading on Stocks of Two Large WTC Tenants'

This is a scalable context timeline. It contains events related to the event September 6-10, 2001: Suspicious Trading on Stocks of Two Large WTC Tenants. You can narrow or broaden the context of this timeline by adjusting the zoom level. The lower the scale, the more relevant the items on average will be, while the higher the scale, the less relevant the items, on average, will be.

Insider trading based on advanced knowledge of the 9/11 attacks may have begun on this date, if not earlier. Investigators later discover a large number of put option purchases (a speculation that the stock will go down) that expire on September 30 at the Chicago Board Options Exchange are bought on this date. If exercised, these options would have led to large profits. One analyst later says, “From what I’m hearing, it’s more than coincidence.” [Reuters, 9/20/2001]

Entity Tags: Chicago Board Options Exchange

Timeline Tags: Complete 911 Timeline, 9/11 Timeline

The Chicago Board Options Exchange sees suspicious trading on Merrill Lynch and Morgan Stanley, two of the largest WTC tenants. In the first week of September, an average of 27 put option contracts in its shares are bought each day. Then the total for the three days before the attacks is 2,157. Merrill Lynch, another WTC tenant, see 12,215 put options bought between September 7-10, when the previous days had seen averages of 252 contracts a day. [Independent, 10/14/2001] Dylan Ratigan of Bloomberg Business News, speaking of the trading on Morgan Stanley and other companies, says, “This would be one of the most extraordinary coincidences in the history of mankind if it was a coincidence.” [ABC News, 9/20/2001]

Entity Tags: Morgan Stanley, World Trade Center, Dylan Ratigan, American Airlines, Chicago Board Options Exchange

Timeline Tags: Complete 911 Timeline, 9/11 Timeline

$2.5 million in put options on American Airlines and United Airlines are reported unclaimed. This is likely the result of the suspension in trading on the New York Stock Exchange after the attacks which gave the SEC time to be waiting if the owners showed up to redeem their put options placed the week before the 9/11 attacks. [San Francisco Chronicle, 9/29/2001]

Entity Tags: New York Stock Exchange, American Airlines, United Airlines

Timeline Tags: Complete 911 Timeline, 9/11 Timeline

Jay Hallen, a 24-year old Yale graduate, is bored with his job at a real-estate firm. He is fascinated with the Middle East, and has taken some Arabic classes and read some history books about the region. He contacts Reuben Jeffrey, an adviser to CPA head L. Paul Bremer whom Hallen had met in 2002 when trying to land a job at the White House, and asks if there is a job for him in Baghdad.
'I Don't Have a Finance Background' - Three weeks later, Hallen is in Baghdad, and meets with Thomas Foley, the CPA official in charge of privatizing Iraq’s state-owned enterprises. Foley, a former classmate of President Bush and a major Republican donor, says he is putting Hallen in charge of Baghdad’s stock exchange. Hallen is shocked. “Are you sure?” Hallen asks. “I don’t have a finance background.” No problem, Foley responds. He will be the project manager; his subordinates will do the actual work. Before the invasion, Baghdad’s stock exchange was primitive by American standards; author Rajiv Chandrasekaran will describe it as loud, boisterous, and, despite all appearances, quite functional. After the invasion it was looted to the bare walls and ignored by the first wave of US economic reconstruction specialists. But Iraqi brokers and businessmen want it reopened, so the CPA acquiesces.
Revamping the Exchange - Hallen launches an ambitious, if almost entirely ignorant, plan to modernize and upgrade the stock exchange to make it the most technologically sophisticated exchange in the Arab world. He also wants to implement a new securities law that would make the exchange independent of the Finance Ministry. The Iraqi brokers and businessmen who clamored for the exchange to reopen are horrified at Hallen’s plans. “People are broke and bewildered,” broker Talib Tabatabai—a graduate of Florida State’s business department—tells Hallen. “Why do you want to create enemies? Let us open the way we were.” Tabatabai, like other brokers, believes Hallen’s plan is ludicrously grandiose. “It was something so fancy, so great, that it couldn’t be accomplished,” he will later recall. But Hallen is unmoved.
Hallen's View - “Their laws and regulations were completely out of step with the modern world,” Hallen will later say. “There was just no transparency in anything. It was more of a place for Saddam and his friends to buy up private companies that they otherwise didn’t have a stake in.” To just reopen the exchange the way it was, Hallen will insist, “would have been irresponsible and short-sighted.” Hallen recruits a team of American volunteers, most with no more experience or knowledge of finance than he has, to rewrite the securities laws, train the brokers, and purchase the necessary computers. By the spring of 2004, CPA head Bremer approves the new laws and appoints nine Iraqis hand-picked by Hallen to become the exchange’s board of governors.
No CPA Role - The new exchange board names Tabatabai as its chairman. The new laws have no place for a CPA adviser as a decision-maker; immediately a conflict between Hallen and the board arises. Hallen wants to wait several more months for the new computer system to arrive and be installed; unwilling to wait, Tabatabai and the board members buy dozens of dry-erase boards for the exchange floor, and two days after Hallen’s tour ends, the exchange is open for business. Without CPA oversight, the exchange quickly begins functioning more or less as it did before the invasion. When asked what would have happened had Hallen not been assigned to reopen the exchange, Tabatabai will answer: “We would have opened months earlier. He had grand ideas, but those ideas did not materialize.… Those CPA people reminded me of Lawrence of Arabia.” [Washington Post, 9/17/2006]

Entity Tags: Rajiv Chandrasekaran, Reuben Jeffrey, Talib Tabatabai, Thomas Foley, Iraq Finance Ministry, Coalition Provisional Authority, Jay Hallen, L. Paul Bremer

Timeline Tags: Iraq under US Occupation

Slate reports that two years after the 9/11 attacks, neither the Chicago Board Options Exchange nor the Securities and Exchange Commission will make any comment about their investigations into insider trading before 9/11. “Neither has announced any conclusion. The SEC has not filed any complaint alleging illegal activity, nor has the Justice Department announced any investigation or prosecution.… So, unless the SEC decides to file a complaint—unlikely at this late stage—we may never know what they learned about terror trading.” [Slate, 9/10/2003]

Entity Tags: US Department of Justice, US Securities and Exchange Commission, Chicago Board Options Exchange

Timeline Tags: Complete 911 Timeline, 9/11 Timeline

Ordering 

Time period


Email Updates

Receive weekly email updates summarizing what contributors have added to the History Commons database

 
Donate

Developing and maintaining this site is very labor intensive. If you find it useful, please give us a hand and donate what you can.
Donate Now

Volunteer

If you would like to help us with this effort, please contact us. We need help with programming (Java, JDO, mysql, and xml), design, networking, and publicity. If you want to contribute information to this site, click the register link at the top of the page, and start contributing.
Contact Us

Creative Commons License Except where otherwise noted, the textual content of each timeline is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike