Israel’s High Court of Justice has begun hearing the appeals of eight former bankers who were convicted of charges relating to Israel’s biggest financial scandal.
The eight men, all former heads of Israel’s leading banks, were given large fines and, in some cases, prison sentences, last April and May. The punishments by the Jerusalem District Court culminated the scandal surrounding the bank share collapse of 1983.
The manipulation of bank share prices at the time spurred buying of shares until they dominated 70 percent of the market. When the Tel Aviv Stock Market crashed in October 1983, many small investors and private businesses were devastated, and billions of shekels were lost.
Only the intervention of the government, which effectively nationalized the banks, prevented large-scale bankruptcies and the closing of major banks.
The affair cost Israeli taxpayers approximately $9 billion.
Among those seeking an appeal of their sentences this week Ernst Japhet, the former chairman of the board of Bank Leumi; Aharon Meir of Bank Mizrahi; and Rafael Racanati of Israel Discount Bank.
Japhet, who received the harshest sentence, was given an 11-month prison term and fined some $300,000.
An attorney for two of the former bankers argued this week that their clients did not have the necessary criminal intent for conviction. The lawyer also said the case was one of double jeopardy. In addition to the sentences handed down last year, he said, a government inquiry commission in 1986 had banned the defendants from any further involvement in their banks.
Arguments in the case are expected to last several weeks.
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