Everything is fine at Psagot but not OK

It’s a win-win situation for everybody at Psagot. Or is it? So why does the entire affair leave an unpleasant feeling?

By STELLA KORIN-LIEBER
October 31, 2010 23:39
3 minute read.
Psagot Investment House

ROY VERMUS 58. (photo credit: Psagot CEO Roy Vermus)

Everything seems fine. Barely nine months have gone by since the investigation began into Psagot Investment House Ltd., and Israel Securities Authority chairman Zohar Goshen is gaining real-time sanctions and a huge deterrent to the market, as well as a promise of the biggest deal of the year.

State Prosecutor Moshe Lador has recorded a significant precedent and will earn the biggest fine ever imposed on an Israeli company, while receiving acknowledgment of responsibility, saving on criminal proceedings and due legal process. On the way, somebody has already done the dirty work for both of them and removed two esteemed managers – Roy Vermus and Shai Yaron – without having to worry about hearings, proof and a trial.

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York’s Israel representative Jeremy Blank and his friends at York get rid of Psagot and get money for it. Zehavit Cohen and Apax Partners get the deal they desire without any complications, and NIS 140 billion of the public’s money looks safer.

So why does the entire affair leave an unpleasant feeling? Why are so many people shifting about uncomfortably in their chairs when everyone is claiming that all is correct and everything is excellent? Why is there the need for forced excuses like those appearing in the press releases of the Justice Ministry spokesman? Why was there pressure to finish everything off by Shabbat? What was the hysterical urgency? Since when does the Justice Ministry, headed by Yaakov Neeman, work on Shabbat? Apax lawyers from Herzog, Fox, Neeman, Ehud Sol and Ilanit Landsman-Yogev met urgently on Friday and put out a press release on Shabbat and briefed journalists in the afternoon on Shabbat.

What happened – did war break out? The state prosecutor and the ISA demanded somebody take responsibility.



Jeremy Blank from York, the owners when the investigation began, refused to take responsibility in the name of the company it controlled. So Zehavit Cohen from Apax was ready to acknowledge responsibility and recognize the damage.

Lador and Goshen were happy. The question is why did the two regulators accept such a cosmetic taking of responsibility from an external body? After all, Cohen and Apax had absolutely no connection to Psagot and its nostro money when the events occurred. So what is their acknowledgment of responsibility and damage worth? It seems that as part of the discussions and decisions the “findings of the investigation” were presented to Apax’s executives.

That is what is written in the press release. Since when has there been such generosity by the state prosecutor in presenting findings and to future buyers? Did others connected to the affair receive the findings to glance over? This requires explanation. This can even be seen as an apparent obstruction of the investigation due to “Lack of public interest.”

Once again that weary joke. On Friday, Moshe Lador told Apax, “After Psagot will take upon itself all the aforementioned steps and will complete the process, the case will be closed against Psagot due to lack of public interest.”

If there is no public interest at stake, why does anybody need to take responsibility, and why pay NIS 150 million, and why demand that the managers be ousted? If there is no public interest, why are Goshen and Lador making anything out of the case at all? Yet the press release on the affair twice mentions the word “unique.”


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