Probe launched into pre-attack selling of shares

The US Government is investigating trading in shares of 38 companies, including major airlines, cruise lines, General Motors and Raytheon, to determine if people used advance knowledge of the terror attacks to profit.

The Securities and Exchange Commission asked brokerage and investment firms in the United States and Canada to review their records for trading in the stocks to find any unusual patterns from August 27 to September 11, the day hijackers slammed planes into the World Trade Centre’s towers and the Pentagon.

There was unusually heavy trading in airline and related stocks several days before the attacks, using a market tactic that essentially bets that a stock will decline in value.

The SEC list also includes several big companies that were tenants in the collapsed Twin Towers in the heart of New York’s financial district: investment firms Morgan Stanley Dean Witter, the complex’s biggest occupant, and Lehman Brothers, Bank of America and the financial firm Marsh & McLennan.

The SEC has not disclosed details of its investigation, part of a worldwide inquiry into possible advance trading by individuals linked to the terrorists.

But the agency’s list of 38 companies was posted Monday on the website of the Investment Dealers Association of Canada, which represents that country’s securities firms.

The association sent a notice of the list to its approximately 190 member firms.

‘‘These are the ... securities the United States Securities and Exchange Commission is investigating in the United States. We ask that you review same with a view of determining any unusual trading patterns,’’ the website posting said.

Alex Popovic, vice president of enforcement for the dealers’ group, said Tuesday that the SEC had asked brokerage firms to concentrate on stocks on the list, but not to limit their review.

‘‘One shouldn’t be wearing blinders when looking at that sort of thing,’’ he said by telephone from Toronto.

SEC spokesman Michael Robinson would not comment Tuesday.

SEC Chairman Harvey Pitt told Congress last week that the agency’s top priority is to pursue its investigation of possible trading by people associated with the terrorists.

If such trading is found to have occurred, ‘‘We will do everything within our power to track those people down and bring them to justice,’’ Pitt said in testimony to the House Financial Services Committee.

The 38 companies also include the parents of major airlines American, Continental, Delta, Northwest, Southwest, United and USAirways as well as cruise lines Carnival and Royal Caribbean, aircraft maker Boeing and defence contractor Lockheed Martin.

In the days before the terrorist assaults, unusually high numbers of put options were purchased for the stocks of AMR Corp and UAL Corp, the parents of American and United each of which had two planes hijacked.

A put option is a contract that gives a holder the right to sell an asset at a specified price before a certain date.

Several insurance companies are on the list American International Group, AXA, Chubb, Cigna, CNA Financial, John Hancock and MetLife.

Germany’s stock market regulator has said it was looking into the possibility of suspicious short-selling of insurance company shares including AXA, a big French company whose shares also are traded in the United States just before the terrorist attacks.

As with put options, investors who engage in short-selling are betting that the price of the stock will fall.

The list of 38 companies also includes American Express, Bank of New York, Bank One, Bear, Stearns; Citigroup, Hercules, L-3 Communications Holdings, LTV, Lone Star Technologies, Progressive Corp, Royal & Sun Alliance, XL Capital and WR Grace.