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A lot of people, but a lot, are gloating at Psagot's comeuppance. Psagot, the biggest and most successful investment house of them all; Psagot, the fearless David that took on the business Goliaths and sought to wrest Africa Israel away from Lev Leviev; Psagot, which opposed Nochi Dankner's insider transactions and which took up arms against the mighty Ofers at Israel Corporation - yes, that's the Psagot in the headlines again. But this time the champagne corks are popping at its expense, not on its behalf.

Strong-nerved Psagot that bent not before the mighty blasts emanating from the most powerful forces in the economy, cheeky Psagot that sought to force tycoons to make good on their debt, Psagot that was sold for NIS 3 million and change, making its managers millionaires - has been stained by the greed of two top managers.

When you take on the holier-than-thou mantle of champion of the little man and declare uncompromising war in defense of the public's money, you have to make sure your own stables are clean. There is good news, though.

The mere fact that this investigation is taking place shows that the Israel Securities Authority and its leader Zohar Goshen will take on anybody, not only the minnows.

Of the many items on Goshen's agenda surely the most important is cleaning up the capital market. Drop the rest, Mr Goshen. Clean out the criminal element. Abolish conflicts of interest in the management of proprietary and public portfolios, underwriting and brokerage. Change the models of remuneration and bonuses. Act to improve transparency at insurers and investment banks and dissolve the ties of ownership between public money and business giants.

Guide the newcomers to the capital market. Summon Eli Barkat, who just bought DS-Apex. Call in Zehavit Cohen, the new majority stakeholder in Psagot (if the acquisition clears the hurdle of this scandal). Phone Yitzhak Tshuva, who bought Excellence. Tell them the new rules of the post-crisis capital market.

What about Roy Vermus, chief executive of Psagot, who fought like a lion on behalf of the Africa Israel bondholders? He hasn't slept well for two years now, just from the thought of this sort of thing happening. For the past two nights he hasn't slept at all because it did happen.

Now Vermus faces two hard tests.

One is guiding the good ship Psagot through the storm. He has to avert more trouble and dissuade the public from withdrawing its money from Psagot. He has to restore a sense of proportion, after finding himself and his company leading the prime-time television news shows.

The second challenge is to prove his innocence and that of his top people and of Psagot in general, while helping the ISA in its work, even at the price of profit.