SEC halts 9/11 trade investigation

On October 7, while the eyes of America were fixed on the California Recall vote, the Securities and Exchange Commission quietly announced it was closing its investigation of suspicious stock trades connected to 9/11. The SEC's reason for closing the investigation can best be summed up as "What insider trading?".

Well, for those who aren't aware, here's what happened just a few days prior to 9/11:

- 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.

- On September 10, 4,516 put options on American Airlines were bought on the Chicago exchange, compared to only 748 calls

- 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 $45.00 put options bought in the three trading days before Black Tuesday; this compares to an average of 27 contracts per day before September 6.

- Merrill Lynch & Co., with headquarters near the Twin Towers, saw 12,215 October $45.00 put options bought in the four trading days before the attacks; the previous average volume in these options had been 252 contracts per day.

Now, the CIA routinely monitors stock trades looking for exactly these kinds of suspicious transactions. The fact that these trades themselves failed to sound any alarms is in itself suspicious.