The Israel Securities Authority on Tuesday arrested the CEO of the Poalim Capital Markets company - the investment branch of Israel's second largest, Bank Hapoalim - and a prominent stockbroker, following suspicions of a major insider trading scheme. Poalim Capital Markets CEO Nir Burnstein allegedly warned stockbroker Ofer Izenberg of expected losses to Bank Hapoalim due to the global economic crisis, and of an expected significant drop in the bank's share price, before the information was made public. Izenberg wasted little time in selling Hapoalim stocks before the publication of a financial report on Hapoalim's losses, then bought them back at a lower price after the report's appearance, making hundreds of thousands of shekels in the process. Both men were released to house arrest until Friday. The suspects are barred from leaving the country and have been denied access to telephone or Internet communications for the duration of their house arrest, as part of measures aimed at preventing them from being in contact with other suspects in the investigation. Izenberg is a broker in the Futures, Contracts and Options (MAOF) Market, and owns a stock management company. The ISA investigation found that on January 8, 2008, Bank Hapoalim executives began discussing a report to be published in two days that would bring to light sharp drops in the value of shares invested in by the bank. The report, published on January 10, said the bank's 2007 profits would be influenced by a loss of $180 million - 16 percent of the bank's overall profit. "Ofer Izenberg and Nir Burnstein have close social and business links, and the investigation has found that Burnstein transferred the information from the initial report [before it was publicized] to Izenberg," the ISA said. On January 10, following the publication of the report, trade on the Tel Aviv Stock Exchange was suspended for approximately half an hour. Immediately after the resumption of trade, Hapoalim's shares dropped by 4.71%, and they ended the trading day with a significant drop of 2.9%. The ISA has since found that Izenberg allegedly used the insider information he received from Burnstein to sell 879,635 shares of Bank Hapoalim before the release of the report, sending 59 sell orders to the Touareg Consulting firm, which is registered to an address in the Virgin Islands. Touareg's registration details are identical to those of Izenberg's own consulting company. Touareg continued to sell Hapoalim shares after the publication of the report. In total, 1,092,886 Hapoalim shares were sold on January 10, amounting to some NIS 20 million. Izenberg then bought nearly all the shares - 1,086,886 - back, making a profit of NIS 337,000, the ISA said. NIS 250,000 of that profit came directly from the tip passed along from Burnstein, it said.