Highly publicized allegations of insider trading in advance of 9 / 11 generally rest on reports of unusual pre-9/11 trading activity in companies whose stock plummeted after the attacks. Some unusual trading did in fact occur, but each such trade proved to have an innocuous explanation. For example, the volume of put options - investments that pay off only when a stock drops in price - surged in the parent companies of United Airlines on September 6 and American Airlines on September 10 - highly suspicious trading on its face.

Yet, further investigation has revealed that the trading had no connection with 9/11. A single US-based institutional investor with no conceivable ties to al-Qaeda purchased 95 percent of the UAL puts on September 6 as part of a trading strategy that also included buying 115,000 shares of American on September 10. Similarly, much of the seemingly suspicious trading in American on September 10 was traced to a specific US-based options trading newsletter, faxed to its subscribers on Sunday, September 9, which recommended these trades.

These examples typify the evidence examined by the investigation. The SEC and the FBI, aided by other agencies and the securities industry, devoted enormous resources to investigating this issue, including securing the cooperation of many foreign governments. These investigators have found that the apparently suspicious consistently proved innocuous. (Joseph Cella interview (Sept 16, 2003; May 7, 2004; May 10-11, 2004); FBI briefing (Aug 15, 2003); SEC memo, Division of Enforcement to SEC Chair and Commissioners, "Pre-September 11, 2001 Trading Review," May 15, 2002; Ken Breen interview (Apr. 23, 2004); Ed G. interview (Feb. 3, 2004).

Notice ... the commission makes no mention in its footnote of the 36 other companies identified by the SEC in its insider trading probe. What about the pre-9/11 surge in call options for Raytheon, for instance, or the spike in put options for the behemoth Morgan Stanley, which had offices in WTC 2? The 9/11 Commission Report offers not one word of explanation about any of this. The truth, we must conclude, is to be found between the lines in the report's conspicuous avoidance of the lion's share of the insider trading issue.

Indeed, if the trading was truly "innocuous", as the report states, then why did the SEC muzzle potential whistleblowers by deputizing everyone involved with its investigation? The likely answer is that so many players on Wall Street were involved that the SEC could not risk an open process, for fear of exposing the unthinkable. This would explain why the SEC limited the flow of information to those with a "need to know", which, of course, means that very few participants in the SEC investigation had the full picture.

It would also explain why the SEC ultimately named no names. All of which hints at the true and frightening extent of criminal activity on Wall Street in the days and hours before 9/11. The SEC was like a surgeon who opens a patient on the operating room table to remove a tumor, only to sew him back up again after finding that the cancer has metastasized through the system.

At an early stage of its investigation, perhaps before SEC officials were fully aware of the implications, the SEC did recommend that the FBI investigate two suspicious transactions. We know about this thanks to a 9/11 Commission memorandum declassified in May 2009 which summarizes an August 2003 meeting at which FBI agents briefed the commission on the insider trading issue. The document indicates that the SEC passed the information about the suspicious trading to the FBI on September 21, 2001, just ten days after the 9/11 attacks.

Although the names in both cases are censored from the declassified document, thanks to some nice detective work by Kevin Ryan we know whom (in one case) the SEC was referring to. The identity of the suspicious trader is a stunner that should have become prime-time news on every network, world-wide. Kevin Ryan was able to fill in the blanks because, fortunately, the censor left enough details in the document to identify the suspicious party who, as it turns out, was none other than Wirt Walker III, a distant cousin to then-president G W Bush.

Several days before 9/11, Walker and his wife Sally purchased 56,000 shares of stock in Stratesec, one of the companies that provided security at the World Trade Center up until the day of the attacks. Notably, Stratesec also provided security at Dulles International Airport, where AA 77 took off on 9/11, and also security for United Airlines, which owned two of the other three allegedly hijacked aircraft. At the time, Walker was a director of Stratesec. Amazingly, Bush's brother Marvin was also on the board.

Walker's investment paid off handsomely, gaining $50,000 in value in a matter of a few days. Given the links to the World Trade Center and the Bush family, the SEC lead should have sparked an intensive FBI investigation. Yet, incredibly, in a mind-boggling example of criminal malfeasance, the FBI concluded that because Walker and his wife had "no ties to terrorism ... there was no reason to pursue the investigation." The FBI did not conduct a single interview. [34]

You are referring to my paper "Evidence for Informed Trading on the Attacks of September 11." [See here.] The following two references from the paper are relevant to what you are describing. [2] 9/11 Commission memorandum entitled "FBI Briefing on Trading", prepared by Doug Greenburg, 18 August 2003, [22].

The 9/11 Commission memorandum that summarized the FBI investigations refers to the traders involved in the Stratesec purchase. From the references in the document, we can make out that the two people had the same last name and were related. This fits the description of Wirt and Sally Walker, who were known to be stock holders in Stratesec. Additionally, one (Wirt) was a director at the company, a director at a publicly traded company in Oklahoma (Aviation General), and chairman of an investment firm in Washington, DC (Kuwam Corp). Here are two other recent articles on Stratesec and its operators. [See here and here.]

The stock of Stratesec, I should add by myself, increased in value from $0.75 per share on September 11 to $1.49 per share when the market re-opened on September 17. As a firm that provides technology-based security for large commercial and government facilities, Stratesec benefited from the soaring demand of security companies right after 9/11.

Kevin Ryan: In late 2005, George Tenet became a director for Viisage, which had been flagged by the SEC for 9/11 trading but never investigated. Viisage was led by Roger LaPenta, formerly of Lockheed.

Seven months later, in 2006, FBI director Louis Freeh also joined the Viisage board. One might think that when both the CIA director (on 9/11) and the FBI director (from 1993 to June 2001) joined a company suspected of 9/11 insider trading, we might want to go back and actually investigate the SEC's flagging of that company. But, of course, that was not the case. In 2009, "Bandar Bush" hired Freeh as his personal attorney.

According to the employee, about five minutes before the attack the entire Deutsche Bank computer system had been taken over by something external that no one in the office recognized and every file was downloaded at lightning speed to an unknown location. The employee, afraid for his life, lost many of his friends on September 11, and he was well aware of the role which the Deutsche Bank subsidiary Alex Brown had played in insider trading. [39]

Due to time constraints, we can currently offer you neither information nor anyone on the part of our client to talk to regarding this requested topic.

Kroll Ontrack was not at the site of the data recovery - the devices at the Twin Towers have been completely destroyed or vaporized. The firm Kroll was, however, at that time active in the field of computer-forensic investigations, securing devices in the surrounding buildings.

Ms Fitts, what are your general thoughts related to the alleged 9/11-insider trading?

Catherine Austin Fitts: Well, I've never been able to see concrete evidence that the insider trading has been proved. There's a lot of anecdotal information from investment bankers and people in the investment community that indicate that there was significant insider trading, particularly in the currency and bond markets, but again it hasn't been documented.

I think around situations like 9/11 we've seen things that can only be explained as insider trading. Therefore, it wouldn't surprise me if it turns out the allegations are true, because my suspicion is that 9/11 was an extremely profitable covert operation and a lot of the profits came from the trading. It wouldn't even surprise me if it turns out that the Exchange Stabilization Fund traded it and that some of the funding for the compensation fund for the victims came from the ESF.

Insider trading happens around these kinds of events, but if you really want to produce evidence of insider trading, you need the subpoena powers of the SEC, and of course we know that they haven't exercised them. If anything, right after 9/11, the government settled a significant amount of cases I presume because a lot of the documents were destroyed by the destruction of WTC building number 7, where the SEC offices and other governmental investigation offices were. [43]

Catherine Austin Fitts: 9/11 was extraordinarily profitable for Wall Street, they of course got a kind of "Get Out of Jail Free card" as I've just described. In addition, the largest broker of government bonds, Cantor Fitzgerald, was destroyed, and there was a great deal of money missing from the federal government in the prior four or five years. If you look at the amount of funds involved, it is hard to come to a conclusion other than massive securities fraud was involved, so I find it very interesting that this happened. [44]

Catherine Austin Fitts: In addition, the federal government took the position that they couldn't produce audited financial statements after 9/11, because they said the office at the Pentagon that produced financial statements was destroyed. Now given what I know of the federal set up of financial statements, I am skeptical of that statement.

But needless to say, if you take the government on its word, you had another "Get Out of Jail Free card" for four trillion dollars and more missing from the federal government. So if you're just looking at the financial fraud angle, there were a lot of parties that benefited from 9/11. But then of course what 9/11 did, it staged the passage of the Patriot Act and a whole series of laws and regulations that I collectively refer to as "The Control on Concentration of Cash Flow Act." It gave incredible powers to centralize.

In addition, if you look at monetary policies right after 9/11 - I remember I was over in the City of London driving around with a money manager and his phone rang and he answered it on his speaker phone. It was somebody on Wall Street who he hadn't talked to since before 9/11, and he said to him: "Oh Harry, I am so sorry about what has happened, it must have been very traumatic." And the guy said: "Don't be ridiculous! We were able to borrow cheap short and invest long, we're running a huge arbitrage, we're making a fortune, this is the most profitable thing that ever happened to us!" - So you could tell the monetary policies and sort of insider games were just pumping profits into the bank at that time, so that was very profitable.

But of course the big money was used for a significant movement of the military abroad and into Afghanistan and then into Iraq ... You could see that the country was being prepared to go to war. And sure enough, 9/11 was used as a justification to go to war in Afghanistan, to go to war in Iraq, and commit a huge number of actions, and now much of the challenges about the budget are the result of extraordinary expenditures on war including in Afghanistan and Iraq and the costs of moving the army abroad and engaging in this kind of empire building with ground military force.

So I think if you ask Cui Bono on 9/11, one of the big categories was all the people who made money on engineering the popular fear they needed to engineer these wars. I believe whether it was financial fraud, engineering new laws or engineering wars, it was a fantastically profitable covert operation. [45]

Five-year Treasury bills are the best investments in the event of a global crisis, in particular one like this which has hit the United States. The papers are treasured because of their safety, and because they are covered by the US government, and usually their prices rise if investors shun riskier investments, such as shares. [47]

The US Federal Reserve creates money to fund the war and lends it to the American government. The American government in turn must pay interest on the money they borrow from the Central Bank to fund the war. The greater the war appropriations, the greater the profits are for bankers. [48]

Question: Did suspicious trading activities of uncovered put options on futures markets occur shortly before 9/11?

James G Rickards: Well, the trading documents certainly look suspicious. It is simply a fact that an unusually high volume of purchases of put-options for the two airlines occurred over the three trading days before the attacks. This is a mere fact, no speculation, no guessing around. This is clearly obvious from the documents of the trading sessions on the derivatives exchanges.

Question: Do you think that the intelligence agencies could have got a warning signal based on this information?

James G Rickards: Theoretically that is possible, if are you are looking and watching out for this. But there was far more significant information, which was ignored.

Question: Do you also think that some people with foreknowledge operated speculatively in the option markets?

James G Rickards: Based on the documentation of the trading session it seems that this has been the case, yes.