A fleet of limousines bearing former top bank executives drew up before the Jerusalem District Court on Thursday for the opening of a trial many Israelis believe is being held eight years too late.
The defendants are the former chairmen and other ranking officials of Israel’s largest banks.
They are accused of manipulating the stocks their banks issued the public in a way that precipitated a crash on the Tel Aviv Stock Exchange, which wiped out the savings of thousands of investors in 1983.
The scandal was investigated by a judicial commission, headed by Chaim Beisky of the High Court of Justice. It recommended in 1986 that the bankers involved be barred for life from working for Israeli banks.
Another three years passed before Attorney General Yosef Harish decided there was insufficient evidence to indict anyone.
Harish’s decision was overruled on appeal to the High Court of Justice, which ordered a criminal trial. The deadline for civil action to recover lost funds expired in October 1990.
Absent from the courtroom is one of the prime defendants, Ernst Japhet, former chairman and chief executive officer of Bank Leumi.
Forced to retire in 1986, Japhet moved to New York, where he works as a consultant to banks. Sources there said he has no intention of returning to Israel for the trial.
Nevertheless, the High Court here ruled Monday that Japhet must return part of the inflated severance pay he arranged for himself before resigning. It also cut his pension in half.
JTA has documented Jewish history in real-time for over a century. Keep our journalism strong by joining us in supporting independent, award-winning reporting.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
