Insider Trading and Terror: US Study Uncovers Israeli Stock Market Manipulation”.

In recent investigations, US researchers Robert J. Jackson Jr. and Joshua Mitts from New York University and Columbia University discovered that traders in New York and Tel Aviv were speculating on a collapse in the Israeli stock market prior to a terrorist attack by Hamas. The study found that certain traders had inside information about the impending attacks and profited from them.

The Israeli security authorities are taking these reports seriously and conducting an investigation into the events surrounding the attack. Short sellers, who bet on falling prices, were particularly active in trading the ETF MSCI Israel, which tracks Israeli stocks listed on the Tel Aviv Stock Exchange (TASE). The volume of short sales on October 2nd exceeded that seen 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 Hamas may have been involved in these activities. If true, this could have significant implications for criminal authorities and regulators worldwide. 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 take advantage of non-public information to profit from falling prices by borrowing shares, selling them, and buying them back at a lower price later on. Parties involved in short sales targeted not only Bank Leumi shares but also dozens of other Israeli shares in the main indices TA-35 and TA-90 due to significant price movements caused by events surrounding Israel’s attack.

Overall, these findings suggest a pattern of suspicious trading activity surrounding events in Israel, raising questions about ethical and legal implications for profiting from insider information. As investigations continue, it remains unclear whether any connections to terrorist organizations such as Hamas will be uncovered.

In summary, traders betting on a collapse in Israel’s stock market prior to a terrorist attack by Hamas profited from insider information through short selling activities using ETF MSCI Israel tracked on Tel Aviv Stock Exchange (TASE). This raises ethical concerns about profiting from insider information while posing legal challenges for regulatory authorities worldwide if terrorists use similar financial techniques for funding their activities.