“In asking Canadian authorities to help probe suspicious trading related to last month’s terrorist attacks, the Securities and Exchange Commission is casting a wider net still in a campaign that has yet to offer proof of illegal profiteering from the tragedy,” writes Michael Schroeder in today’s Wall Street Journal.

“A list of 38 companies that the SEC shared with Canadian markets isn’t linked to specific allegations of improper trading, said a person close to the probe. While the SEC has been investigating every possible lead, evidence hasn’t surfaced yet that proves people related to the terrorist network profited, the person added.”

“Since the Sept. 11 attacks, the SEC and U.S. market participants, including exchanges and broker-dealers, have been assisting the Justice Department in a review of trading and account records. At least seven other foreign countries also are engaged in similar probes. Regulators are looking for investors who might have tried to profit from bets that certain stocks would decline, either through short selling or via options.”

“As part of the broad probe, the SEC has asked U.S. securities firms to produce customer accounts, and stock-trading records involving short selling before the attacks. Short sellers sell borrowed shares in the hope they will profit by being able to buy them back later at a lower price.”

“In a letter sent last week, the SEC requested the Ontario Securities Commission circulate to Canadian market participants a list of companies that might have been the target of negative trading activity during the days before the attacks. Most of the companies the SEC named are in economically beleaguered industries, such as airlines, insurance and hospitality.”

“The Toronto Stock Exchange, the center of trading for large-cap stocks in Canada, is investigating, an exchange spokesman said. The Investment Dealers Association of Canada, a trade group, has asked its members to look for suspicious trading.”

“Alex Popovic, the dealers association’s vice president of enforcement, said that in his view it’s unlikely that terrorists did any trading through Canadian investment dealers, but the members will do everything possible to ‘ensure that this hasn’t happened.’ “

“The probe still may turn up terrorist involvement in the markets. ‘There’s a fair chance that one of these guys, one of their charities, or a wealthy benefactor subsidizing a charity, might have traded,’ said William McLucas, former SEC enforcement chief. Advance knowledge of the attack “could have been used to reward a benefactor,” he added.”