|
Getting your Trinity Audio player ready...
|
By: Hal C Clarke
In a groundbreaking report titled “Trading on Terror?” law professors Robert Jackson Jr. from New York University and Joshua Mitts from Columbia University have unveiled shocking evidence suggesting that investors linked to Hamas may have profited significantly from the October 7 terrorist attacks. The professors identified major bets against stocks of Israeli companies placed in the weeks leading up to the massacre.
One particularly alarming example outlined in the 67-page report involves an unidentified trader who shorted 4.43 million shares in Israel’s largest bank, Leumi, between September 15 and October 5. This strategic move resulted in an astronomical profit of nearly $900 million after Israel’s economy faced turmoil amid the conflict in Gaza.
The professors, drawing on their expertise in short-selling, pointed to a sharp and unusual increase in trading in risky short-dated options on Israeli companies just before the attacks. These short positions were notably placed on the Enterprise Investment Scheme (EIS), a security traded on the New York Stock Exchange providing exposure to Israeli exchange-traded funds.
The report highlighted an investor making a staggering 227,000 short transactions against the EIS on October 2, a mere five days before the Tribe of Music Festival was targeted by Hamas. The subsequent fall in the value of EIS on October 11 yielded substantial profits for those who had shorted Israeli shares.
Furthermore, the professors found that short selling of Israeli securities on the Tel Aviv Stock Exchange (TASE) dramatically increased, surpassing levels seen during other crises such as the 2008 financial crisis, the Israel-Gaza war in 2014, and even the COVID-19 pandemic.
The researchers pointed to patterns in early April, correlating with reports of Hamas planning its attack on Israel. Short volume in EIS peaked on April 3, similar to the levels observed on October 2, and significantly higher than other days prior to April 3.
The implications are grave, suggesting that traders with foreknowledge of the attacks may have profited from these tragic events. The report has prompted a probe by Israeli authorities into the suspicious stock trading activity.
The possibility that these trades were orchestrated by individuals affiliated with Hamas raises concerns about the financing of terror. U.S. authorities could potentially freeze the ill-gotten gains, as American laws strictly prohibit the funding of terrorism.
While it remains unclear whether the profits from these short positions were used to finance the Israel-Gaza war, recent revelations indicate that Hamas and other pro-Palestinian groups have been actively seeking funding through cryptocurrency. Between August 2021 and June 2023, these groups collectively received over $134 million in crypto, according to Israeli government seizure orders and blockchain analytics reports.
Hamas alone received $41 million in digital currency during this period. The Wall Street Journal previously reported that Hamas was among three pro-Palestinian terrorist organizations fundraising with cryptocurrency on the Binance crypto exchange.
The researchers concluded that these findings raise critical questions about the intersection of financial markets, terrorism, and the exploitation of advanced trading strategies for illicit gains. The investigation into the potential involvement of investors linked to Hamas underscores the need for continued scrutiny and vigilance in the global fight against terrorism.
