Investors are said to have done business with the terrorist group Hamas’ attack on Israel, a report by two US researchers suggests. What their observations are based on.
Some investors apparently benefited massively financially from the attack on Israel by the radical Islamic terrorist group Hamas at the beginning of October. This comes from one. Research by law professors Robert Jackson Jr. of New York University and Joshua Mitts of Columbia University found that there was a suspicious amount of short selling of Israeli company stocks in the run-up to the attacks.
When selling short, investors bet on falling prices. This involves selling previously borrowed shares with the intention of buying them back at a later date at a cheaper price. The difference is retained as profit. If investors have a very high probability that share prices will fall – for example due to insider information – short sales are particularly lucrative.
Some investors may have taken advantage of this in the days before Hamas’ attack on Israel, as the two US researchers write. “Our results suggest that traders who were aware of the impending attacks profited from these tragic events,” their report states.
Speculated with Hamas terror? Suspicious movements at the MSCI Israel ETF
Jackson Jr. and Mitts base their suspicions on trading movements on the MSCI Israel ETF. The index fund contains stocks from more than 100 Israeli companies, such as Bank Leumi or the website builder Wix. Short selling on the ETF “suddenly and significantly shot up” on October 2nd, it said. In addition, there were more than four million shares sold short in one company between mid-September and the beginning of October alone, which ultimately led to profits “in the millions”. The researchers rely on data from the US securities regulator Finra.
In addition, short sales overall would have exceeded the volume of past crises, such as the Israel-Gaza war in 2014 or during the corona pandemic. Another indication that some investors may have foreseen the events.
However, it is unclear whether these were also members of the terrorist group Hamas itself. According to the Reuters news agency, Israeli authorities are now investigating the report.
Note: This article first appeared on .
Source: Stern
