Quote Originally Posted by Fabius Maximus View Post
Question: do you have any references or links about pre-9/11 trading by probably terrorists? I've heard the rumors. There were investigations, but I recall (just from memory) that their official reports denied this theory.
Poteshman, Allen M., 2006, Unusual Option Market Activity and the Terrorist Attacks of September 11, 2001, Journal of Business 79, 1703-1726. (PDF)

Abstract:
After the terrorist attacks of September 11, 2001 there was a great deal of speculation that the terrorists or their associates had traded in the option market on advanced knowledge of the impending events. It is nearly impossible, however, to assess the option market trading leading up to this or any other event in the absence of systematic information about the characteristics of option market activity. This paper provides this information by computing the distributions of option market volume statistics both unconditionally and when conditioning on the overall level of option activity, the return and trading volume on the underlying stocks, and the return on the overall market. When the option market activity in the days leading up to the terrorist attacks is compared to the benchmark distributions, volume ratio statistics are seen to be at typical levels. An indicator of long put volume, however, appears to be unusually high which is consistent with informed investors having traded in the option market in advance of the attacks.
The insider trading case of Amr "Tony" Elgindy is also interesting.