harel investments 88.
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Guy Weissman, Harel Investment House's deputy CEO and CFO, who was fired on suspicion of embezzlement activities, was interrogated on Monday by the Israel Police National Fraud Unit, for allegedly misappropriating NIS 100 million in company funds.
"An investigation of Harel Investment House has been under way for some time, which revealed suspicions of fraudulent activities in the company's finances," Harel Insurance Investments, Israel's third largest insurance company, stated in a notice to the Tel Aviv Stock Exchange in which it disclosed that it dismissed Weissman on Sunday. "We filed a complaint against Weissman with the Israel Police National Fraud Unit and the Israel Securities Authority."
Harel added that the company was cooperating with the ISA and the police.
"If you look at the statistics, embezzlement is often found among the senior ranks of the company and is often inevitable. So what's important is early detection in particular in light of compliance of Sarbanes-Oxley rules, which require companies to show accountability to their stakeholders, clients and customers," said Shay Zandani, CEO of Kesselman Global Risk Management Solutions. "According to statistics only about one-in-ten fraud cases are discovered."
Weissman, who had been working at Harel Investment House, a subsidiary of Harel Insurance Investments, for 19 years, with the past 10 managing the company's financial affairs as chief financial officer and deputy CEO, was interrogated on Monday afternoon by the Israel Police National Fraud Unit Bat Yam. The Tel Aviv District Court decided on Monday evening to keep Weissman in custody until April 25.
The insurance company declined to comment on how the embezzlement was carried out, whether other people were involved or what the financial extent of the embezzlement was.
"On the basis of information, the company possesses so far, Harel Investment House's clients were not affected by the suspected activity," Harel said in its statement to the bourse in an attempt to calm concerned clients.
However, Harel, controlled by the Hamburger family, is believed to have carried out an internal investigation for some months following suspicions raised by the ISA.
"The case has now been passed on to the police and therefore we can not comment on the investigation," the ISA said.
Zandani noted that one of the crucial tasks of companies that are entangled in or discover internal fraud cases, is to act fast to identify and clean-up the problem as well as institute anti-fraud systems in an effort to win back the clients' and investors' confidence.