Deutsche Bank Alex Brown and 9/11 Insider Trading – A Final Word from Lars Schall

Deutsche Bank, 11 September 2001 New york, Photo: FEMA, Michael Rieger

Deutsche Bank, 11 September 2001 New york, Photo: FEMA, Michael Rieger

I had the feeling that there was one final thing left for me to do regarding my research of informed trading activities in connection to the terror attacks of September 11, 2001 in order to close that chapter of my journalistic work once and for all. And so I went back to the 9/11 stories involving Deutsche Bank Alex Brown. I considered it a journalistic obligation to exercise diligence. – By Lars Schall

The following article was originally published at the Foreign Policy Journal here.

Re: Deutsche Bank Alex Brown and 9/11 Insider Trading

I had the feeling that there was one final thing left for me to do regarding my research of informed trading activities in connection to the terror attacks of September 11, 2001 in order to close that chapter of my journalistic work once and for all. And so I went back to the 9/11 stories involving Deutsche Bank Alex Brown. I considered it a journalistic obligation to exercise diligence.

With regard to the research that I’ve done on the topic of “9/11 Insider Trading” there was one thing that I hadn’t gone after sufficiently enough: so far I had not asked the Deutsche Bank for a statement on two particular issues. I also noticed that no one else had asked the Deutsche Bank for it – at least I could not find anything that suggested otherwise.

What those two issues were should become evident if I just cite some various e-mails. Moreover, they will give you all relevant links/sources to follow up on the whole story if you want to. I am aware that the format is a bit unusual and a bit hard to follow, but I am confident that you will understand it in the end.

On December 31, 2012, I wrote this e-mail to the press department at the headquarters of Deutsche Bank in Frankfurt, Germany (db.presse@db.com), which included two relevant excerpts from my research.

Media Request re Deutsche Bank – Alex Brown – 9/11 Informed Trading

Dear Ladies and Gentlemen,

My name is Lars Schall, I am a freelance journalist for finance. Earlier this year I’ve published an article at Asia Times Online, the biggest English news website in Asia, on the topic of alleged informed trading activities prior to the terror attacks of September 11, 2001:

http://www.atimes.com/atimes/Global_Economy/NC21Dj05.html.

In this article I’ve mentioned that something strange occurred related to Deutsche Bank’s computer systems in New York City.* The source for this, the investigative journalist Michael C. Ruppert, repeated this story again on record in this video of mine:

http://www.foreignpolicyjournal.com/2012/04/09/terror-trading-911/.

Since I have never seen that the Deutsche Bank was officially asked about this, I would like to ask you for a comment on this specific story.

I would also like to ask for a comment from you on the fact that Alex Brown, a subsidiary of Deutsche Bank, traded massive put options purchases on United Airlines Company UAL through the Chicago Board Option Exchange (CBOE).**

Kind regards,

Lars Schall.

* Excerpt:

But let’s get back to the subject of destruction. On September 11, not only human life, aircraft and buildings were destroyed in New York City, but also data on computers and in archives. For example, several federal agencies occupied space in Building 7 of the World Trade Center, including the Securities and Exchange Commission on floors 11 to 13.

Those and other data could have given information about the alleged 9/11 insider trading (though it seems to be very unlikely that no backup existed elsewhere independent of the local computer systems). In fact, some technology companies were commissioned to recover damaged hard disks, which had been recovered from the debris and dust of Ground Zero.

One of these companies was the English company group Convar, more precisely: their data rescue center in the German city Pirmasens. Erik Kirschbaum from the news agency Reuters reported in December 2001 that Convar had at that time successfully restored information from 32 computers, supporting “suspicions that some of the 911 transactions were illegal”.

‘The suspicion is that inside information about the attack was used to send financial transaction commands and authorizations in the belief that amid all the chaos the criminals would have, at the very least, a good head start,’ says Convar director Peter Henschel.” [36] Convar received the costly orders – according to Kirschbaum´s report the companies had to pay between $20,000 and $30,000 per rescued computer – in particular from credit card companies, because: “There was a sharp rise in credit card transactions moving through some computer systems at the WTC shortly before the planes hit the twin towers. This could be a criminal enterprise – in which case, did they get advance warning? Or was it only a coincidence that more than $100 million was rushed through the computers as the disaster unfolded?” [37]

The companies for which Convar was active cooperated with the FBI. If the data were reconstructed they should have been passed on to the FBI, and the FBI, according to its statutory mandate, should have initiated further investigation based on the data to find out who carried out these transactions. Henschel was optimistic at the time that the sources for the transactions would come to light.

Richard Wagner, a Convar employee, told Kirschbaum that “illegal transfers of more than $100 million might have been made immediately before and during the disaster. ‘There is a suspicion that some people had advance knowledge of the approximate time of the plane crashes in order to move out amounts exceeding $100 million,’ he says. ‘They thought that the records of their transactions could not be traced after the main frames were destroyed’.” [38]

Wagner’s observation that there had been “illegal financial transactions shortly before and during the WTC disaster” matches an observation which Ruppert describes in Crossing the Rubicon. Ruppert was contacted by an employee of Deutsche Bank, who survived the WTC disaster by leaving the scene when the second aircraft had hit its target. 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]

** I specifically asked financial journalist Max Keiser, who for years had worked on Wall Street as a stock and options trader, about the put option trades. Keiser pointed out in this context that he “had spoken with many brokers in the towers of the World Trade Center around that time. I heard firsthand about the airline put trade from brokers at Cantor Fitzgerald days before.” He then talked with me about an explosive issue, on which Ruppert elaborated in detail in Crossing the Rubicon.

Max Keiser: There are many aspects concerning these option purchases that have not been disclosed yet. I also worked at Alex Brown & Sons (ABS). Deutsche Bank bought Alex Brown & Sons in 1999. When the attacks occurred, ABS was owned by Deutsche Bank. An important person at ABS was Buzzy Krongard. I have met him several times at the offices in Baltimore. Krongard had transferred to become executive director at the CIA. The option purchases, in which ABS was involved, occurred in the offices of ABS in Baltimore. The noise which occurred between Baltimore, New York City and Langley was interesting, as you can imagine, to say the least.

Under consideration here is the fact that Alex Brown, a subsidiary of Deutsche Bank (where many of the alleged 9/11 hijackers handled their banking transactions – for example Mohammed Atta) traded massive put options purchases on United Airlines Company UAL through the Chicago Board Option Exchange (CBOE) – “to the embarrassment of investigators”, as British newspaper The Independent reported. [7]

On September 12, the chairman of the board of Deutsche Bank Alex Brown, Mayo A Shattuck III, suddenly and quietly renounced his post, although he still had a three-year contract with an annual salary of several million US dollars. One could perceive that as somehow strange.

A few weeks later, the press spokesperson of the Central Intelligence Agency (CIA) at that time, Tom Crispell, declined all comments, when he was contacted for a report for Ruppert’s website From the Wilderness, and had being asked “whether the Treasury Department or FBI [Federal Bureau of Investigation] had questioned CIA executive director and former Deutsche Bank-Alex Brown CEO [chief executive officer], A B ‘Buzzy’ Krongard, about CIA monitoring of financial markets using PROMIS and his former position as overseer of Brown’s ‘private client’ relations.” [8]

Just before he was recruited personally by former CIA chief George Tenet for the CIA, Krongard supervised mainly private client banking at Alex Brown. [9]

In any case, after 9/11 on the first trading day, when the US stock markets were open again, the stock price of UAL declined by 43%. (The four aircraft hijacked on September 11 were American Airlines Flight 11, American Airlines Flight 77 and UAL flights 175 and 93.)

Nothing happened afterwards. So on February 6, 2013 I wrote again to the press department of Deutsche Bank in Frankfurt:

Media Request re Deutsche Bank – Alex Brown – 9/11 Informed Trading

Dear Ladies and Gentlemen,

May I remind you that I’m still waiting for an official statement with regards to my questions that I did forward to you on December 31, 2012?

On this occasion I would also like to ask you why then-chairman of the board of Deutsche Bank Alex Brown, Mayo A Shattuck III, actually renounced his post on September 12, 2001? So far I was not able to find an official explanation/statement related to it. However, given the circumstances, the whole thing looks a bit fishy, wouldn’t you agree?

Thank you for your attention!

Best regards,

Lars Schall.

A few hours later I received a response from Deutsche Bank in New York City, namely, from Duncan King, the Director of Press and Media Relation of Deutsche Bank in the Americas.

Having read Mr. King’s response, I contacted immediately the newspaper The Independent in the UK (newseditor@independent.co.uk) with this e-mail in order to get in touch with Chis Blackhurst, the Editor of The Independent. Moreover, I copied the e-mail to Mr. King.

Media Request for Mr. Chris Blackhurst

Dear Ladies and Gentlemen,

Could you forward the following message to Mr. Chris Blackhurst, please?

Thank you!

Dear Mr. Blackhurst,

Solomon Brothers Building (Building 7) on 11 September 2001, housed the Securities and Exchange Commission. Photo, NY District Attorney. Anonymous Photographer.

Solomon Brothers Building (Building 7) on 11 September 2001, housed the Securities and Exchange Commission. Photo, NY District Attorney. Anonymous Photographer.

My name is Lars Schall, I am a journalist for finance from Germany. I have one question:

On which sources have you actually based your report for The Independent back in October of 2001, “Mystery of terror ‘insider dealers’”, when you wrote:

“To the embarrassment of investigators, it has also emerged that the firm used to buy many of the ‘put’ options … on United Airlines stock” was Deutsche Bank Alex Brown?

I know a long time has passed since then but I came across two serious scientific papers that suggest that informed trading on UAL via put options took place indeed:

-    Allen M. Poteshman: “Unusual Option Market Activity and the Terrorist Attacks of September 11, 2001”, published in The Journal of Business, University of Chicago Press, 2006, Vol. 79, Edition 4, page 1703-1726.

-    Marc Chesney, Remo Crameri and Loriano Mancini: “Detecting Informed Trading Activities in the Option Markets”, University of Zurich, April 2010.

However, when I asked the press department of Deutsche Bank, inter alia, for a comment on this – that Alex Brown traded massive put options purchases on United Airlines Company UAL through the Chicago Board Option Exchange (CBOE) – I was given this statement today:

Lars-

Here is the statement for your piece.  Thank you for being in touch.

“We wouldn’t comment on this type of speculation.”

Best,

Duncan

https://brandportal.intranet.db.com/img/modules/logo.gif

Duncan King

Director | Press and Media Relations, Americas

Deutsche Bank AG, Filiale New York

60 Wall Street, 10005-2836 New York, NY, USA

Thus, I am interested if the story related to Alex Brown and the put options on UAL that you have reported on was/is just “speculation,” as far as you were/are concerned.

For more information related to the scientific papers that I have mentioned:

http://www.atimes.com/atimes/Global_Economy/NC21Dj05.html

and:

http://www.atimes.com/atimes/Global_Economy/ND27Dj02.html

Thank you very much for your attention!

Best regards,

Lars Schall.

Up to this moment of publication, Mr. Blackhurst / The Independent has not responded.

Moreover, I wrote on the same day (February 6) to Mike Ruppert, the author of the book Crossing the Rubicon:

Re Deutsche Bank’s computer systems on 9/11 // Alex Brown

Hi Mike,

Building 7, Collapsed with free-fall acceleration. Photo, 9/11 Research

Building 7, Collapsed with free-fall acceleration. Photo, 9/11 Research

Could you do me a favour, please? Could you get in touch for me with this former employee of Deutsche Bank?

Ruppert was contacted by an employee of Deutsche Bank, who survived the WTC disaster by leaving the scene when the second aircraft had hit its target. 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.

I am sorry that I have to ask you for this, but here follows the reason why…

Best,

Lars.

Then I showed him the e-mail that went to The Independent, including the response from Mr. King.

Mike Ruppert wrote back (and I am allowed to quote him):

Not possible. I got the statement only on the condition that I never identify the source.

Are you trying to get them killed? I will never disclose the source. I cannot. I gave my word. I will not put someone’s life in danger.

I told Mr. Ruppert:

I think that this is an answer that everyone can understand who knows about the rules of high-stake investigative journalism.

He then asked me to add:

All told there have been at least ten confirmed homicides in connection with PROMIS/Ptech software.

Next I wrote an e-mail to Max Keiser:

Hi Max,

Is it possible to back this up a bit in order to counter the word “speculation” (see below)?

Deutsche Bank Headquarters, Frankfurt, Germany, Photo, Thomas Wolf, www.foto-tw.de

Deutsche Bank Headquarters, Frankfurt, Germany, Photo, Thomas Wolf, http://www.foto-tw.de

I specifically asked financial journalist Max Keiser, who for years had worked on Wall Street as a stock and options trader, about the put option trades. Keiser pointed out in this context that he “had spoken with many brokers in the towers of the World Trade Center around that time. I heard firsthand about the airline put trade from brokers at Cantor Fitzgerald days before.” He then talked with me about an explosive issue, on which Ruppert elaborated in detail in Crossing the Rubicon.

Max Keiser: There are many aspects concerning these option purchases that have not been disclosed yet. I also worked at Alex Brown & Sons (ABS). Deutsche Bank bought Alex Brown & Sons in 1999. When the attacks occurred, ABS was owned by Deutsche Bank. An important person at ABS was Buzzy Krongard. I have met him several times at the offices in Baltimore. Krongard had transferred to become executive director at the CIA. The option purchases, in which ABS was involved, occurred in the offices of ABS in Baltimore. The noise which occurred between Baltimore, New York City and Langley was interesting, as you can imagine, to say the least.

Under consideration here is the fact that Alex Brown, a subsidiary of Deutsche Bank (where many of the alleged 9/11 hijackers handled their banking transactions – for example Mohammed Atta) traded massive put options purchases on United Airlines Company UAL through the Chicago Board Option Exchange (CBOE) – “to the embarrassment of investigators”, as British newspaper The Independent reported. [7]

Please take a look at this…

Best,

Lars.

Then I showed him also the e-mail that went to The Independent including the response from Mr. King.

Up to this moment of publication, Max Keiser has not responded.

In addition to all of this, I also contacted on February 6, 2013, Paul Elsberg, a press person of Exelon Corporation, a company where Majo A Shattuck III serves currently as Executive Chairman. That e-mail contained both e-mails that I had written to the press department of Deutsche Bank in Frankfurt.

Media Request for Mayo A Shattuck III

Dear Mr. Elsberg,

Would you be so kind to forward the following media request to Mr. Mayo A Shattuck III, please?

Thank you!

Dear Mr. Shattuck,

As a financial journalist from Germany I am interested in the alleged 9/11 insider trading. As you know, there is an aspect to it that involves Deutsche Bank Alex Brown / put option purchases on United Airlines Company UAL through the Chicago Board Option Exchange (CBOE) / and the fact that you renounced your post as chairman of the board of Deutsche Bank Alex Brown on September 12, 2001.

As you can see below based on the request that I did just forward to the press department of Deutsche Bank, so far I wasn’t able to find an official statement related to your demission of job.

Therefore, may I ask you for such an explanation, please?

Thank you very much!

Up to this moment of publication, there has been no response to my request from Mr. Elsberg, nor Mr. Shattuck.

So, unfortunately, I am not able to provide any further information; instead it was rather futile to go back to this story. Or, like Bertold Brecht wrote at the end of his play, “The Good Person of Szechwan”:

“We feel deflated too. We too are nettled / To see the curtain down and nothing settled.”

And that is that.

Lars Schall is a freelance finance journalist, frequent contributor to international TV programs, and his articles are widely published in international media, including AsiaTimesOnline. Lars Schall is a frequent contributor to nsnbc. Lars Schall entertains his own website, LarsSchall.Com.

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