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Israeli authorities probe suspected insider trading ahead of Hamas attack

US researchers uncover suspicious short-selling surge


In a recent development, Israeli authorities are delving into allegations raised by US researchers who suggest that certain investors might have had advance knowledge of the Hamas plan to attack Israel on October 7.

According to a report on The Guardian, the researchers, Robert Jackson Jr from New York University and Joshua Mitts of Columbia University, point to significant short-selling of Israeli shares leading up to the attacks, potentially leading to substantial profits for those involved.

The researchers noted a conspicuous spike in short-selling of an exchange-traded fund tracking the Israeli stock exchange on October 2, just days before the attack.

Their 66-page report, based on data from the Financial Industry Regulatory Authority, highlights an unusual increase in short-selling of Israeli securities on the Tel Aviv Stock Exchange right before the assault, exceeding levels observed during previous periods of crisis.

The Israel Securities Authority (ISA) is currently investigating the matter, acknowledging that it's under scrutiny by all relevant parties. The researchers' findings also point to a sharp increase in short-selling during a typically low-activity period in Israel due to Jewish holidays.

Intriguingly, the report reveals that while there was no notable increase in shorting of Israeli companies on US exchanges, there was an "unusual increase" in "risky" trades just before the attacks. The researchers suggest that traders informed about the impending attacks may have profited from these tragic events, emphasizing gaps in US and international enforcement of legal prohibitions on informed trading.

The study sheds light on patterns of short-selling observed in early April, aligning with initial reports of Hamas planning its attack. Israeli authorities are closely examining these findings as the investigation unfolds.

[With information sourced from The Guardian]

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