http://www.copvcia.com/stories/oct_2001/krongard.html
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., with headquarters near the Twin Towers, 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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