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Terrorists' profits probed
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September 18, 2001: 11:43 a.m. ET
Possible short-sales of insurance firms by suspect Osama bin Laden cited
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NEW YORK (CNNfn) - U.S. and European regulators are investigating whether Osama bin Laden and his associates profited from last week's terrorist attack that destroyed the World Trade Center and part of the Pentagon, resulting in thousands of casualties, CNN has confirmed.
President Bush has named bin Laden as the prime suspect in last Tuesday's attack in which terrorists hijacked four commercial jets and crashed them into the twin towers and the Pentagon. The fourth jet crashed in a Pennsylvania field apparently after passengers tried to overpower the terrorists.
U.S. Securities and Exchange Commissioner Harvey Pitt said his agency's enforcement division is looking into a wide variety of transactions involving short-selling of reinsurance companies.
Trades in three companies that specialize in reinsurance – that is, insuring insurance companies – are being scrutinized: Munich Re, Swiss Re and AXA, a French insurance conglomerate.
Short-selling occurs when investors sell borrowed stock in hopes the price will fall, allowing them to replace the shares at a lower price and pocket the difference.
If bin Laden and his associates "shorted" the reinsurance companies just before the attack, it would indicate they had prior knowledge that the attack was about to occur.
"We've heard those reports about terrorist involvement in our markets. Our enforcement division has been looking into a variety of market actions that could be linked to these terrible acts including the subjects of the rumors," Pitt said.
The Chicago Board Options Exchange also is launching an investigation.
This follows investigations being conducted by securities regulators in Germany, Switzerland, England and other countries into possible short- selling of insurance stocks before the attack.
The Times of London reported Tuesday that the Central Intelligence Agency requested the United Kingdom's Financial Services Authority to investigate suspicious share movements.
In addition, Japanese securities regulators are said to be investigating trading in crude oil futures. 
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