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Profile: Chicago Board Options Exchange

 
  

Positions that Chicago Board Options Exchange has held:



 

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Chicago Board Options Exchange actively participated in the following events:

 
  

August 6, 2001: Suspicious Trading of Companies Affected by 9/11 May Begin by This Date      Complete 911 Timeline

       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, 9/20/01]
People and organizations involved: Chicago Board Options Exchange
          

September 6-10, 2001: Suspicious Trading of Put Option Contracts on American and United Airlines Occur      Complete 911 Timeline

      
A. B."Buzzy" Krongard.
Suspicious trading occurs on the stock of American and United, the two airlines hijacked in the 9/11 attacks. “Between 6 and 7 September, the Chicago Board Options Exchange [sees] purchases of 4,744 put option contracts [a speculation that the stock will go down] in UAL versus 396 call options—where a speculator bets on a price rising. Holders of the put options would [net] a profit of $5 million once the carrier's share price [dive] after September 11. On September 10, 4,516 put options in American Airlines, the other airline involved in the hijackings, [are] purchased in Chicago. This compares with a mere 748 call options in American purchased that day. Investigators cannot help but notice that no other airlines [see] such trading in their put options.” One analyst later says, “I saw put-call numbers higher than I've ever seen in ten years of following the markets, particularly the options markets.” [Associated Press, 9/18/01; San Francisco Chronicle, 9/19/01] “To the embarrassment of investigators, it has also [learned] that the firm used to buy many of the ‘put’ options ... on United Airlines stock was headed until 1998 by ‘Buzzy’ Krongard, now executive director of the CIA.” Krongard was chairman of Alex Brown Inc., which was bought by Deutsche Bank. “His last post before resigning to take his senior role in the CIA was to head Bankers Trust—Alex Brown's private client business, dealing with the accounts and investments of wealthy customers around the world.” [Independent, 10/14/01]
People and organizations involved: Deutsche Bank, American Airlines, Computer Assisted Passenger Prescreening System, Chicago Board Options Exchange, United Airlines
          

September 10, 2003: SEC, Others Still Keep Mum About Insider Trading Investigations      Complete 911 Timeline

       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, 9/10/03]
People and organizations involved: Chicago Board Options Exchange, US Department of Justice, Securities and Exchange Commission
          

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