Tel Aviv Stock Exchange Denies Unusual Trading before Hamas Attack on Oct. 7

The Tel Aviv Stock Exchange said on Tuesday that a report prepared by two American researchers, indicating the presence of investors in Israel who may have benefited from their prior knowledge of the Palestinian Islamic Resistance Movement (Hamas) attack on October 7, is inaccurate, according to Reuters.

Research work conducted by law professors Robert Jackson Jr. of New York University and Joshua Mitts of Columbia University found major short selling of stocks before the attacks that sparked the ongoing war between Israel and Hamas.

They said that “short selling activity has increased significantly over that seen during many other crisis periods” such as the 2008 financial crisis and Covid-19.

They wrote that for investors in Leumi, Israel's largest bank, 4.43 million shares were sold short during the period from September 14 to October 5, generating profits of NIS 3.2 billion ($859 million).

But the Tel Aviv Stock Exchange said the researchers' estimates were wrong because stock prices are listed in agorot, an Israeli financial unit equivalent to one percent of a shekel, leaving the potential short sale profit at just NIS 32 million.

"I don't see in the data anything close to what they wrote in the research paper," Yaniv Bagot, head of trading at the exchange, said. "There was nothing unusual in short (short selling) positions on the exchange during the two months before the attack."

The Israel Securities Authority said in a separate statement that in the days before the Hamas attack, no unusual trading was detected or it would have required further investigation.