9/11 Terrorists Made Millions On The Stock Market

New research by CSU academic Dr Hugh McDermott shows how terrorists make millions playing the stockmarket, using their inside information about forthcoming attacks.

Terrorism: The Ultimate in Insider Trading

A Charles Sturt University (CSU) researcher says that what happens to financial markets after a terrorist attack, and how terrorists make money from these market movements, is illustrated by the suspicious trading that occurred immediately before the successful attacks on New York, Madrid and London.

Dr Hugh McDermott, senior lecturer in law enforcement at the CSU Australian Graduate School of Policing in Manly, says terrorists make money by speculating on the markets.

“When terrorists have ‘inside information’ about an imminent attack, they purchase financial derivatives before the attack and make millions from the subsequent market movements.

“Global financial markets reacted swiftly to the news of the terrorist attacks on New York (2001), Madrid (2004) and London (2005), with a general flight to quality. Gold, bonds and defence stock strengthened and investors flocked to highly liquid, developed markets.

“In contrast, less mature markets suffer as do stocks such as reinsurance and aviation. American Airlines’ share price dropped 39 per cent after the 9/11 attacks and United Airlines dropped 42 per cent. Even a novice trader can see the windfall that could be achieved in shorting these stocks before a terrorist attack.”

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