Israeli regulators are looking into a report claiming that investors earned millions of dollars by short-selling Israeli stocks days ahead of Hamas’s Oct. 7 attack, apparently profiting off foreknowledge of the bloody incursion, multiple media outlets reported Tuesday.
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(Oded Balilty/AP)
Israel is expanding its ground operation against Hamas into southern Gaza, forcing many civilians already displaced by the conflict to flee again as hostilities resume.
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The unknown traders behind the activity placed bets against the value of a bundle of Israeli stocks five days before the massacre, leading to a “significant spike in short selling” of that fund, professors Robert J. Jackson Jr. of the New York University School of Law and Joshua Mitts of Columbia Law School wrote in a study published Monday.
Traders made similar bets against the value of “dozens” of Israeli companies that trade in Tel Aviv, the authors note.
“Our findings suggest that traders informed about the coming attacks profited from these tragic events,” Jackson and Mitts wrote.
Short selling is a trading strategy that allows investors to bet that the value of a stock will decline. Short sellers borrow shares in a company or fund and sell them at the current market price, with the expectation that the price of those shares will fall soon. If prices decline, investors buy shares back at the lower value and return them to the lender, taking the margin between the original share value and the new, lower value, as profit.
“The short selling that day far exceeded the short selling that occurred during numerous other periods of crisis, including the recession following the financial crisis, the 2014 Israel-Gaza war, and the covid-19 pandemic,” Jackson and Mitts wrote.
In one instance, investors short-sold the unusually high sum of 4.43 million new shares of Bank Leumi, an Israeli bank, on the Tel Aviv Stock Exchange in the Sept. 14-Oct. 5 period, Jackson and Mitts wrote.
The Tel Aviv Stock Exchange pushed back on initial claims by Jackson and Mitts that traders profited $859 million on the Bank Leumi short position, citing a mistake in their methodology. The authors then corrected that figure to about $8 million, but stood by their finding that 4.43 million shares had been short-sold.
The Washington Post could not immediately reach Israeli law enforcement officials for comment.
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Israel-Gaza war
Israel is expanding its ground operation against Hamas into southern Gaza, forcing many civilians already displaced by the conflict to flee again as hostilities resume.
For context: Understand what’s behind the Israel-Gaza war.
End of carousel
The unknown traders behind the activity placed bets against the value of a bundle of Israeli stocks five days before the massacre, leading to a “significant spike in short selling” of that fund, professors Robert J. Jackson Jr. of the New York University School of Law and Joshua Mitts of Columbia Law School wrote in a study published Monday.
Traders made similar bets against the value of “dozens” of Israeli companies that trade in Tel Aviv, the authors note.
“Our findings suggest that traders informed about the coming attacks profited from these tragic events,” Jackson and Mitts wrote.
Short selling is a trading strategy that allows investors to bet that the value of a stock will decline. Short sellers borrow shares in a company or fund and sell them at the current market price, with the expectation that the price of those shares will fall soon. If prices decline, investors buy shares back at the lower value and return them to the lender, taking the margin between the original share value and the new, lower value, as profit.
“The short selling that day far exceeded the short selling that occurred during numerous other periods of crisis, including the recession following the financial crisis, the 2014 Israel-Gaza war, and the covid-19 pandemic,” Jackson and Mitts wrote.
In one instance, investors short-sold the unusually high sum of 4.43 million new shares of Bank Leumi, an Israeli bank, on the Tel Aviv Stock Exchange in the Sept. 14-Oct. 5 period, Jackson and Mitts wrote.
The Tel Aviv Stock Exchange pushed back on initial claims by Jackson and Mitts that traders profited $859 million on the Bank Leumi short position, citing a mistake in their methodology. The authors then corrected that figure to about $8 million, but stood by their finding that 4.43 million shares had been short-sold.
The Washington Post could not immediately reach Israeli law enforcement officials for comment.
