In a recent study, researchers from New York University and Columbia University have found evidence suggesting that some investors may have had prior knowledge of the Hamas attack on Israel. This study reveals significant short-selling activity in the days leading up to the attack, indicating that certain traders anticipated the event. The Israel Securities Authority is currently investigating these claims. Additionally, the study highlights a surge in selling activity for Israeli company shares and an Exchange Traded Fund (ETF) tracking Israeli shares. Let's delve deeper into the details and implications of this investigation.
Evidence of Significant Short-Selling
Traders appeared to anticipate the attack, leading to a surge in short-selling activity.
In the days leading up to the Hamas attack on Israel, there was a notable increase in short-selling activity, according to a study conducted by researchers from New York University and Columbia University. Traders seemed to have anticipated the attack and took advantage of this knowledge to engage in significant short-selling.
The researchers observed a surge in investors seeking to sell shares in Israeli companies on the Tel Aviv Stock Exchange. Additionally, there was increased selling activity in an Exchange Traded Fund (ETF) that tracks Israeli shares. This level of short-selling exceeded what had been seen during previous crises, suggesting that some traders had prior knowledge of the impending attack.
Investigation by Israel Securities Authority
The Israel Securities Authority is currently looking into the matter.
The Israel Securities Authority has launched an investigation into the claims of potential insider trading related to the Hamas attack on Israel. The authority is examining the evidence presented in the study and is determined to uncover any wrongdoing or illegal activities.
It is crucial to maintain the integrity of financial markets and ensure that all investors have a fair and level playing field. If any individuals are found to have had prior knowledge of the attack and profited from it, appropriate legal action will be taken to hold them accountable.
Profits from Short-Selling Leumi Shares
Short-selling of Leumi shares resulted in significant profits for some traders.
During the period between September 14 and October 5, a staggering 4.43 million new shares in Leumi, Israel's largest bank, were short-sold. This short-selling activity resulted in profits of 3.2 billion shekels ($862 million; £684 million) for the traders who engaged in it.
The study concludes that these traders, who had information about the impending attack, were able to profit from their actions. This type of trading occurs when there are gaps in the enforcement of legal prohibitions on informed trading, allowing those with prior knowledge to take advantage of the situation.