The Israel Securities Authority this morning raided Bank Leumi (TASE:LUMI) subsidiary Psagot Ofek Investment House Ltd. as part of a year-long investigation into suspected violations of the Regulation of Investment Advice and Investment Portfolio Management Law (1995). All the company's executives were taken for questioning, including Psagot Ofek general manager Gabriella Ravid. The Securities Authority investigators also seized documents and computer files.
The raid at Psagot Ofek followed raids on December 5 at the offices of Leumi Pia Trust Management Co., Bank Leumi's mutual fund management company.
The affair began in the spring of 2003, when Psagot Medadit - 120 raised a huge amount of capital. Psagot Medadit - 120 is a mutual fund of Psagot Managers of Mutual Funds - Leumi, a subsidiary of Bank Leumi.
Psagot Medadit - 120 raised a record NIS 1.7 billion within days of being marketed, raising suspicion at the Securities Authority that Bank Leumi had violated the Investment Advice Law by illegally recommending the fund to the bank's customers.
Published by Globes [online], Israel business news - www.globes.co.il - on December 20, 2004
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