Investors linked to Hamas may have reaped massive financial windfalls from the Oct. 7 terrorist attacks, according to a pair of prominent US researchers — who discovered major bets against stocks of Israeli companies that were placed during the weeks leading up to the massacre. In an explosive report published on Monday titled “Trading on Terror?” law professors Robert Jackson Jr. of New York University and Joshua Mitts of Columbia University detailed suspicious stock-trading activity that has since sparked a probe by Israeli authorities. In one shocking example cited in the the 67-page paper, an unidentified trader shorted 4.43 million shares in Israel’s largest bank, Leumi, between Sept. 15 and Oct. 5 — resulting in a nearly $900 million profit after Israel’s economy ground to a halt amid the war in Gaza. So-called “short sellers” place complex bets against stocks that pay off when the stocks fall. Jackson, a former Securities and Exchange Commission commissioner and Mitts, a short-selling expert, concluded that the short sellers were likely linked to Hamas. “Although we see no aggregate increase in shorting of Israeli companies on US exchanges, we do identify a sharp and unusual increase, just before the attacks, in trading in risky short-dated options on these companies expiring just after the attacks,” Jackson and MItts wrote. The duo cited transactions made on the Enterprise Investment Scheme (EIS), a security traded on the New York Stock Exchange that gives investors exposure to Israeli exchange-traded funds though the MSCI Israel ETF. EIS tracks the main indices on the Tel Aviv Stock Exchange, including the most prominent Israeli companies, making an investment in EIS similar to making a bet on the Israeli economy, according to Israeli newspaper Haaretz. Jackson and Mitts noticed that somebody short sold the EIS in early October, meaning they were betting on the fact that they would fall. On Oct. 2 — just five days before Hamas paraglided into the Tribe of Music Festival — an investor made a staggering 227,000 short transactions against the EIS. Jackson and Mitts said the volume of short selling positions was so significant, “it is extremely unlikely that the volume of short selling on Oct. 2 occurred by random chance.” Those who shorted Israeli shares on Oct. 2 profited handsomely as the value of EIS fell by 7.1% on Oct. 11, the first day the US market was open after the massacre, per Haaretz. Nearly a month after the horrific event — which saw at least 1,200 Israelis killed and more than 240 taken hostage — EIS lost 17.5% of its value, the outlet reported. Similarly, “short selling of Israeli securities on the Tel Aviv Stock Exchange (TASE) increased dramatically,” Jackson and Mitts found. The professors said this occurred at a rate that exceeded “numerous other periods of crisis,” including the financial crisis of 2008, the Israel-Gaza war in 2014 and even the COVID-19 pandemic. Haaretz, citing anonymous Israeli sources, said that Hamas has financially savvy members, and it isn’t implausible that they lay behind these shorts. If the trades were, in fact, made by someone affiliated with Hamas or were done on Hamas’ behalf, US authorities could freeze the ill-gotten gains, as American laws prohibit the financing of terror, Haaretz noted. The professors also referred to patterns in early April when it was reported that Hamas was initially planning its attack on Israel. “Short volume in EIS (the MSCI Israel ETF) peaked on April 3 at levels very similar to those observed on Oct. 2, and was far higher by an order of magnitude than other days prior to April 3,” they said. The Post has sought additional comment from Jackson and Mitts. It’s unclear if the profits from these short positions were used to fund the Israel-Gaza war. However, it was earlier revealed that Hamas was among three pro-Palestine terrorist groups that sought funding for its operations through cryptocurrency. Between August 2021 and June 2023, Hamas, Palestinian Islamic Jahid (PIJ) and its Lebanese ally, Hezbollah, have collectively received over $134 million in crypto, according to Israeli government seizure orders and blockchain analytics reports reviewed by The Wall Street Journal. Hamas received some $41 million in digital currency over the nearly two-year period, The Journal reported. PIJ — whose militants from the Gaza Strip joined Hamas in storming Israel over the weekend — has received crypto funds to the tune of $93 million between August 2021 and this June, according to the outlet. Crypto funds were seized from crypto exchange Binance in June reportedly belonging to Hezbollah, a longtime foe of Israel based in Lebanon, though it’s unclear how much digital currency the group had. It wasn’t immediately clear whether the funding was used to finance Hamas’ Oct. 7 airstrikes and raids that have obliterated Israeli cities and left residents defenseless. Researchers who study Hamas’ funding, however, told The Journal that crypto remains a top resource the group uses to generate funds, including bringing in cash from Gaza and Egypt.