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Arye Sheer, CEO of Israel Discount Bank of New York Ltd., has been put on paid leave following the settlement of a US money-laundering investigation.
Israel Discount Bank Ltd. said in a filing with the Tel Aviv Stock Exchange that Sheer accepted the decision under protest. He will be replaced by Haim Bar-Ziv, the New York bank's executive vice president.
"The CEO suspension in addition to the bank's agreement to pay a $25 million settlement basically puts an end to the money laundering issue," Yuval Ben Ze'ev, an analyst at Clal Batucha Finance, told The Jerusalem Post. "I don't think he was responsible, but he was the CEO and someone had to pay the price." Ze'ev believes that Sheer will not return to the post.
Sheer's leave is indefinite and he has been restricted from having any contact with the bank or its clients, the lender said. A spokeswoman for Discount declined to comment further. Sheer has been requested to cooperate with IDBNY, its representatives and the various regulatory authorities.
Israel Discount agreed in December to pay as much as $25m. to settle US federal and New York state claims that it had allowed the laundering of $2.2 billion from Brazil through its New York office. It also agreed to set up controls and take other measures to prevent further problems.