Israel Says It Found No Trade Abnormalities Before Hamas Attack

(Bloomberg) -- Israel’s Securities Authority said it found no significant trading abnormalities in the days preceding Hamas’s attack on the country on Oct. 7 that warrant further investigation, responding to claims in a research paper that had caused a public uproar.

The authority, known as ISA, said in a statement on Tuesday that it had opened an investigation into possible suspicious trading soon after the attack. It then reexamined those findings upon publication of a research report on Dec. 4 titled “Trading on Terror,” authored by Robert J. Jackson at New York University School of Law, and Joshua Mitts, at Columbia Law School.

Immediately after Oct. 7, “the investigations department carried out a proactive examination to detect suspicious trading activity, which could be tied to the Hamas attack,” the securities authority said. “This examination did not wield any findings to this effect.” The reexamination following the publication of the report came to a similar conclusion, it said.

The US-based researchers said in the report that they found a “significant spike in short selling in the principal Israeli-company ETF days before the October 7 Hamas attack,” referring to exchange-traded funds popular with investors seeking exposure to a specific region, country or industry. “Our findings suggest that traders informed about the coming attacks profited from these tragic events,” they wrote.

The securities authority said it’s responsible for overseeing trading occurring in the country, “and therefore all the findings mentioned above reflect only trading activity in Israel.” It didn’t comment on trading of Israeli securities abroad, which could include US-listed ETFs.

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