On Tuesday, the Israel Securities Authority arrested Nir Burnstein, CEO of Poalim Capital Markets, on “suspicions of a major insider trading scheme.” Poalim Capital Markets is the investment branch of Israel’s Bank Hapoalim. The Jerusalem Post reports that Burnstein
allegedly warned stockbroker Ofer Izenberg, of expected losses to Bank Hapoalim due to the global economic crisis, and informed him of an expected drastic drop in the bank’s share prices before the information was made public.
Izenberg responded by wasting little time in selling Hapoalim stocks before the publication of a financial report on Hapoalim’s losses, before buying them back up at a lower price after the report’s appearance, making hundreds of thousands of shekels in the process.
The Jerusalem Post reports that the ISA released both men to house arrest until February 20.