Probes into 'suspicious' trading

German Finance Minister Hans Eichel, left, and Bundesbank head Ernst Welteke

By CNN's Tom Bogdanowicz and Brooks Jackson

LONDON, England (CNN) -- European and U.S. regulators are on the hunt for anyone who might have manipulated financial markets ahead of the terror attack in the hope of profiting from it.

Central banks and supervisory bodies in New York and across Europe are conducting investigations into what one European central banker says are ever-clearer signs of market manipulation.

Germany's central bank governor, Ernst Welteke, says there were signs of suspicious movements in oil and gold prices before the attack. Investigators in Europe are also looking at trading in insurance and airline stocks.

There are strong suspicions that British markets may have been used for transactions, says Belgian Finance Minister Didier Reynders. Sources in London say no evidence has turned up yet, although an investigation at all exchanges is being conducted.

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French Finance Minister Laurent Fabius says there are clues, but not yet proof.

One problem is that some of the more complex market transactions, like short-selling of shares, are not directly visible to regulators. But that doesn't mean there isn't a trail. Even shell companies can be pried apart.

"Normally, shell companies, special banks, jurisdictional problems are all set up to make a paper trail more difficult for regulators to follow. The nature of this atrocity, however, is such that there are signs that people who don't usually cooperate will cooperate this time," says Jeffrey Robinson, author of "The Laundrymen."

Even though market manipulation may have been covert, sources close to regulators say they do have the means to pursue the any paper trail of unusual market activity. Cooperation among European central banks and supervisory bodies may prove a key element in the investigation.

"You know that some national central banks are involved in the supervisory body for the markets. So it is important to have a discussion with the governors about that. And we try to have two reports, from the commission and from the supervisory committee, for the 16th of October," says Reynders.

In New York, investigators are looking into the possibility that terrorists might have used short-selling to bet against the stocks of the very airlines they planned to hijack.

Short-selling can yield big profits when stocks go down in value. Those who practice it sell borrowed stock at today's price, hoping to buy it back tomorrow at a lower price -- pocketing the difference as a profit.

Here's how it works: The stock of UAL Corporation -- United's parent -- has plunged from over $30 a share on September 10 to just over $17 at last Friday's close. A person who sold short 1,000 shares of UAL then, and closed out the trade Friday, would have made a profit of $13,720, minus broker's commissions.

Late last week, the New York Stock Exchange reported that the parent companies of both American Airlines and United Airlines experienced sharp increases in short-selling of their stocks in the month that ended the day before the attacks.

Between August 10 and September 10, the NYSE says short sales of UAL Corp. increased 40 percent, American parent AMR Corp increased 20 percent, and aircraft manufacturer Boeing Corp. increased 37 percent.

Short-sellers with advance knowledge of the attack could have made millions.

None of this proves anything. Big increases in short-selling happen all the time. And airlines were in financial trouble even before the attacks, which many speculators may have seen as good financial reason to short their stock.

But federal investigators have said publicly they are looking at reports that the terrorists may have tried to profit from exploiting securities markets.

"We are vigorously pursuing all credible leads but, at this time, we have drawn no conclusions," said Stephen M. Cutler, acting director of enforcement for the U.S. Securities and Exchange Commission.

"Speculation about what we have concluded or not concluded, as well as what we are or aren't looking at, is just that -- speculation -- and it has absolutely no foundation in fact."