The Hamas attack on Israel may have been known to investors before the attack

The recent Hamas attack on Israel on October 7 has raised some eyebrows as new information has come to light suggesting that some investors may have had prior knowledge of the attack and used that information to profit from Israeli stocks .

According to research by law professors Robert Jackson Jr of New York University and Joshua Mitts of Columbia University, there was significant short-selling in stocks before the attacks, which triggered a war that has lasted nearly two months.

The researchers found that days before the attack, traders appeared to be anticipating events to come, citing short interest in the MSCI Israel Exchange Traded Fund (ETF) that “suddenly and significantly increased” on October 2 according to data from the financial industry. Regulatory Authority (FINRA).

The study also revealed that just before the attack, short selling of Israeli securities on the Tel Aviv Stock Exchange (TASE) increased dramatically. In response, the TASE referred Reuters to the Israel Securities Authority, which confirmed that the matter is under investigation by all relevant parties.

The researchers noted that the short selling that occurred before October 7 exceeded the short selling that occurred during many other periods of crisis, including the post-financial crisis recession of 2008, the war Israel -Gaza of 2014 and the COVID-19. pandemic

Teachers also referred to the patterns in early April when it was reported that Hamas was initially planning its attack on Israel. They found that short volume in the MSCI Israel ETF peaked on April 3 at levels very similar to those seen on October 2, suggesting that traders may have been informed about the upcoming attacks and are n they benefited

This new study sheds light on the possibility of insider trading and raises questions about the enforcement of legal prohibitions on insider trading. The story was first reported by Israeli financial news website The Marker.

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