Suspicion dispelled of insider trading in KLM shares before Sept. 11 attacks
SECTION: INTERNATIONAL NEWS
LENGTH: 216 words
DATELINE: AMSTERDAM, Netherlands
The Dutch government dispelled suspicions Tuesday that unusually heavy trading in KLM airlines shares earlier this month could be linked to the terrorist attacks in the United States.
Finance Minister Gerrit Zalm told parliament the sharp drop in share prices of the national airline days before the assaults was not caused by people who knew of the terrorist's plans.
The Securities Board of the Netherlands, the market regulator, investigated the heavy volume of put options in KLM shares, said to be 10 times higher than normal, during a two-day period before the attacks. A put option is a contract that gives a holder the right to sell an asset at a specified price before a certain date.
"We know who bought the contracts and we know why. And fortunately it had nothing to do with terrorism, or insider knowledge about that," Zalm told Dutch television.
Zalm declined to give more details, but he said "everything was OK."
In the three trading days prior to the attacks, KLM shares plunged from 16 euros (dlrs 14.72) to 14.20 euros (dlrs 13.06), a 12 percent fall.
Last week KLM issued a profit warning, anticipating a drop in traffic because of passengers' fears of international terrorism. On Monday, the airline imposed a dlrs 5 security surcharge on every ticket.