Cella Outline

I. Background
A. Joe's Background
B. Origin of Investigation:
1. When did investigation start
2. Why was it initiated
3. What, if any, early indications of unusual trading sparked investigation
4. Aware of any other similar investigations, had SEC considered the issue of
trading in advance of terrorism before 9/11
C. Who worked on Investigation
• Leaders (names and positions)
• Types of Staff
D. What Agencies Involved; Division of Responsibility
1. SEC

2. FBI/DOJ
• who from FBI was involved
• Bill Mackey FBIHQ
• NY
• Chicago
• Any other F.O.s
• SDNY/EDNY USAO
SEC take lead
• What was criteria for referral of account/trader to FBI
• SEC/FBI breakdown on interviews
• Anyone at FBI doing interviews other than NY FO (McRogan, Coleman)
1. SROs
2. CFTC
 3. Fed
4. Any Others
5. Explain working of FRG as it relates to trading
6. Cooperation among agencies involved in investigation
E. Anything considered for investigation and dropped; anything else that should
have been looked at and wasn't
F. Timing: report dated 5/15/02; anything come up after that
II. Scope of Investigation
A. Review list of companies, indices (report at 1)
103 cos.
32 funds and indices
B. How were they selected; role of FBI; any other agency
C. Time period
1. Why August 20 start date (Report at 1)
2. What, if anything, was done re earlier positions established
3. SRO Investigation clearly goes earlier (see tabbed examples)
D. Trading Overseas
1. SEC investigated US trading of foreign stocks (pick up later)
2. what was done re overseas trading outside of SEC jurisdiction
a. how were countries selected (report at 4); why not Spain
b. why 8/27
c. how did list of 38 evolve
1. What relevant companies, if any, were traded exclusively overseas
2. German Central Bank President, Ernst Welteke comments in September
01 re "irrefutable proof of insider trading."
3. Any other countries initially reporting suspicious trading
• what, specifically was done with Germany
E. Size
 • how many interviews
• how many suspicious transactions identified
• Report dated 5/15/02; any activity after report
III. Results
A. Airline Stocks
1. Market Overview (report at 7)
• general market decline August -September
• airline industry hit hard
• How did UAL or AMR compare to peers during this period
2. Option Trading UAL/AMR (report at 8)
a. Press reports of massive put/call imbalance
1. press: reports have it doubled frequently - e.g., 9/18 AP story
b. Highlighted Days
• 9/6/01 UAL Puts; explain trading
• 1 advisor: who was it
• 9/10/01 AMR puts; explain trading
• 2/3 traceable to 1 advisor; what about rest
c. other than two highlighted days, what was done to investigate other
options trading in UAL and AMR
• 8/23 UAL Puts
• 9/5 and 9/7 UAL puts
• what resultsfromthis investigation
d. were these traders interviewed; how was cut made about who to interview
1. How was it determined who did interview/SEC/FBI/both
e. were all suspicious options traders interviewed
I f. public reports about "uncollected" option profits, e.g., 9/20/01 SF
l ^ Chronicle - anything t o this
g. were puts in UAL/AMR consistent with other airlines
 h. Chicago market maker convinced there was illicit trading
• Did SEC interview j
• Conclusions l/i/ ^
Is there option trading on AMR/UAL overseas; what was done to investigate
it
3. Other Airlines option trading •/ ''
What about other airlines? What was done to look at trading of puts a 7
• Were puts/call analyzed;
• any suspicious patterns
• were any interviews conducted
\ anything unexplained

• anything referred to FRG

a. Short-Selling (Report at 10)
a. Describe investigation of short-selling in UAL/AMR
• was there unusual amounts of short-selling
• press reports: short-selling up 40% for UAL and 20% for AMR in
month before attack; any validity
• was there more shorting of UAL/AMR than other airlines
• SEC investigation of shorts in UAL/AMR
• What was NASD asked to do (Tab F)
• Time frame (again shorting pre august documented)
• How many interviews
• Results
• How many overseas accounts kicked to FRG (Report at 10)
• why
• Did FBI report back to SEC re investigation of overseas accounts
• Were any of these suspicious
• Review Flagged accounts in NASD Report
 a. Other airline stock
b. Were airlines, generally, being shorted more than usual during this period
c. What criteria were given to SROs to report trades
d. What criteria for SEC follow-up
• how many short-sellers were interviewed by SEC
• anything unexplained
• how many referred to FRG (because accounts overseas)
• what was follow-up from FRG
a. Press reports of greater short-selling in UAL/AMR than other airlines
f. Overseas trading
A. WTC Tenants
1. Press Reports of unusual put volumes in Morgan Stanley, Merrill Lynch
2. Was that the case
3. Explain investigation
B. Insurers
1. Explain review of insurers' stock
a. what role SROs
b. what criteria
c. what does "atypical price or volume movement" mean
d. why did you decide this price movement in 24 companies meant
there was no unusual trading
e. describe method of choosing insurance companies
• 9/17 Bloomberg article
• other two selections
a. of 8 ins. cos., "with the exception of Munich Re, each of these
companies has securities that are traded in US markets and each
each experienced an increase in volume and/or decline in price"
• what is the exception with Munich re (not traded in US)
 • does this mean SEC did no investigation of Munich re; did
anyUSG
• where is primary trading market for each of these
companies
• Swiss Re and Alliance AG primary overseas - any others
• was investigation limited to instruments trading in US
• what was done to investigate overseas trading
• What did SEC do to monitor investigation of overseas
trading
• Who in USG had this responsibility
• Describe US investigation
• Walk through report on each company; flesh out results of
investigation
1. Swiss RE
• "well known to the staff
• what news items
2. XL Capital
• was there any Staff review or oversight or was solve investigation of suspicious
activity done by SROs
• anything done to double-check
• what guidance was given SROs as to what constitute "suspcious activity"
• why the Sept 4 start date for NYSE
• was any overseas account suspcicious/any middle-easterner
3. AllianzAG
• any staff involvement
• why NYSE Sept 4 start date
4. AIG
• Why were calls suspicious
• Why 9/4 start date
 • Explain staff review and investigation
5. Citigroup
—Any Staff involvement
—Were any put buyers investigated
-what about 8/29, 9/6, 9/7
— what was "suspicious activity"
6. AON
• any staff involvement
• what about 9/7 put trading; how was that investigated by SROs;
7. Marsh & McClennan
• what % of puts were covered by SEC interviews
• explain staff investigation
• anything left uncovered
A. Coordination of SRO review of Insurers
• how were companies identified
• what guidance/criteria given SROs
• "direct" link to persons on FBI list? Indirect link?
B. Other Industry Groups (Report at 19)
• Explain what was done to support conclusion
• Role of SROs
• Role of Commission Staff
• Interviews of how many people
• Any unusual patterns
C. Narrow and Broad-Based Indices and Exchange Traded Funds
1. Explain Investigation
2. RoleofSROs/Staff
3. Anything Unusual
 4. What was done with Foreign Products
D. Results of Overseas Investigations
• How closely did SEC follow foreign investigations
• Who at SEC met with foreign services
• What countries
• How frequently
• What were results
• Were any formal reports received
• Any informal documentary reports (i.e. letters etc.)
• If not SEC, who had responsibility for liason with foreign services
A. Coordination of Review for Specific Names (Report at 5-6)
B. T-Bill Trading (Report at 4)
• trading in 5 year treasury notes investigated, according to Press
• SEC contact w/NY Fed
• Anything else
C. Commodities
Gold, etc
CTFC Role
Key POC

D. Forward Looking Surveillance (Report at 4 n.8., p 6)

• what is being done
• Involvement of SROs/Private Sector
• Coordination with FBI/FBI/IC
• Any truth to press reports re CIA monitoring of securities transactions
A. Other Issues
1. Elgindy case
 1. Any SEC role
2. Any reason to believe Elgindy had advance knowledge
2. SEC role in coordinating industry review of accounts re Control list
3. Why was report not published
IV. Documents
How are documents organized
Are the interview memos organized by category
Is there an index of interviews identifying who people are
Lists of initially suspicious traders or accounts
Is there a list of accounts referred to FBI
Is there a more comprehensive report in existence
Conclusion
Any questions unanswered
Any suspicious trades in overseas accounts/problems tracking ownership
Anything you felt should have been done and was not
Are you confident that your inquiry would have turned up any illicit trading in the U.S.