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Eli Aroch declared unfit to stand trial
By Amit Benaroia
Tags: Eli Aroch, Israel News

The indictment against options speculator Eli Aroch has been suspended due to his health, the Tel Aviv District Court ruled Tuesday. The district psychiatrist found Aroch unfit to stand trial.

The State Prosecution may reindict him in the future, if his mental condition improves.

Aroch was awarded NIS 96 million (valued today at about NIS 120 million) in an arbitration proceeding with Clal Finance in 2006, and in February 2009 he agreed to compromise on just NIS 9.2 million. In exchange, Clal agreed to withdraw its request to cancel the arbitration ruling. A few months prior, Aroch was hospitalized following a suicide attempt.
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Aroch argued that he had invested NIS 5 million in Maof options, but Clal had failed to execute his trade orders, and sold the position before they agreed terms because Aroch had not supplied the appropriate guarantees. Aroch claimed damages based on the difference in value of the securities between the agreed-upon sale date and the date that Clal actually sold the securities.

The arbitrator accepted Aroch's argument that there had been no real need for the guarantees, nor the sale of the securities. Aroch and his former crony David Shiloah were subsequently accused of forging the documents used in the arbitration proceedings, and in the past year were indicted for fraud, forgery and other crimes.

Both the prosecution and Aroch asked the court to suspend the proceedings against Aroch based on the psychiatrist's opinion, and the judge ordered Aroch hospitalized.

As a result, the fate of Aroch's former friend David Shiloah, known as "The Shadow," is now unclear. Shiloah turned against Aroch in 2006 by providing Clal with evidence of forgery - and greatly improved the chances of overturning the arbitration ruling. In exchange for an outcome in favor of Clal, either overturning the ruling or a compromise between the parties, Shiloah promised NIS 16 million, and attorney Yoav Mozer, who brokered the deal, would receive NIS 5 million. But under the deal, if it turns out that Shiloah was actively involved in forging the arbitration documents, Clal is not required to award him anything.
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