Recent research by US researchers Robert J. Jackson Jr. and Joshua Mitts from New York University and Columbia University has shed light on a concerning pattern of suspicious trading activity surrounding events in Israel. The study found that traders in New York and Tel Aviv were placing bets on a collapse in the Israeli stock market prior to a terrorist attack by Hamas, raising questions about the involvement of the terrorist organization in financial activities.
The researchers discovered that certain traders appeared to have inside information about the impending attacks and profited from them, with short sellers being particularly active in trading the ETF MSCI Israel, which tracks Israeli stocks listed on the Tel Aviv Stock Exchange (TASE). Specifically, activity in short selling on the ETF increased five days before the attack, leading to suspicions that some traders may have been aware of the impending events. The volume of short sales on October 2nd was higher than during other times of crisis, such as the financial crisis in 2008 or the Covid pandemic in 2020.
Israeli companies such as Checkpoint, Nice, Teva, and Bank Leumi were among those listed on the TASE. While the researchers did not directly link inside information used by speculators to Hamas, Israeli media suggests that terrorists may have been involved. Suspicious trading activity had also been detected prior to a previous incident in April, indicating a pattern of behavior among certain market participants.
Short sellers profit from non-public information by borrowing shares, selling them at an artificially high price, and buying them back later at a lower price when prices fall due to market forces or other factors. The events surrounding Israel’s attack led to significant price movements on its stock exchange, providing ample opportunities for short sellers to profit. Parties involved targeted not only Bank Leumi shares but also dozens of other Israeli shares listed in indices TA-35 and TA-90.
The findings raise ethical and legal implications for profiting from inside information and highlight potential risks associated with such activities. As investigations continue into these events surrounding Israel’s attack, it remains uncertain whether any connections to terrorist organizations such as Hamas will be uncovered.
In conclusion, this investigation highlights a concerning pattern of suspicious trading activity surrounding events in Israel that raises questions about ethical and legal implications of profiting from inside information. As authorities continue their investigation into these events