Sixty-six pages. The document is so long, detailed and shocking that it details the series of millionaire speculations on the stock market before and immediately after the Hamas massacre on October 7th. The study, published by Ssrn magazine and signed by Robert J. Jackson Jr. of New York University School of Law and Joshua Mitts of Columbia Law School, claims that some dealers linked to terrorists have this knowledge Millions of dollars initially earned weeks of what would happen to Israel. As? By selling shares in Israeli companies without owning them (i.e. “short”). “Traders knew Hamas’s plan and anticipated future events days before the attack,” argue the two researchers in the report, which refers to the Exchange Traded Fund (ETF) index, which fell on October 2, according to data from the Israel Sector Authority peak recorded. So far, the Tel Aviv Stock Exchange has dismissed the case, but Portal has confirmed that “the matter is known and is being investigated by the Israel Securities Regulatory Authority (Isa), which is responsible for regulating the financial market.”
INSIGHTS
Hamas and the real spoils of war
The report published by the two New York professors documents how an unknown trader short-sold 4.43 million shares of Israel’s largest bank, Leumi, between September 15 and October 5, betting that the share price would fall.
After the attack, Leumi’s share price actually collapsed, with a gain of almost 900 million. Short selling exceeded those that occurred during other times of crisis such as the 2008 recession, the 2014 War for the Strip and then the pandemic. “Our results suggest that traders who were aware of impending attacks benefited from these tragic events, and consistent with previous literature, we show that informed trades of this nature fell into gaps in U.S. and international enforcement of regulatory bans Trade takes place,” write the experts. Another trader made up to 227,000 short trades on October 2 against EIS (Enterprise Investment Scheme), a security traded on the New York Stock Exchange. “The value of the EIS – we read in the report – fell by 7.1% on October 11, the first day the US market was open after the attack, and lost 17.5% of its value in the first month , which means “This trader made a killing on the October 2 trades.” According to the researchers, there was a sharp and unusual increase in trading in short-term options on Israeli companies immediately before the attacks. “It is extremely unlikely that the extent of short selling on October 2nd occurred by chance,” the two professors emphasize.
The (crypto)financing network that feeds terrorists
“Hamas, which has been declared a terrorist organization by the US since 1997, cannot do business on the open market,” writes the British newspaper Chron. “Any Hamas member who attempts this risks having their assets frozen by the US Treasury.” For this reason, the organization has used innovative financing systems such as cryptocurrencies. The militia receives the necessary support from outside to question the security of the Jewish state. A Wall Street Journal report highlighted that between August 2021 and June 2023, three terrorist groups (Hamas, Palestinian Islamic Jihad, and its Lebanese ally Hezbollah) received a total of over $134 million in cryptocurrencies. According to the Journal, “Hamas received approximately $41 million in digital currency over a period of nearly two years.” Islamic Jihad received $93 million. A turnover that circumvents sanctions and makes it more difficult to destroy Hamas’ war machine.
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