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At 9 A.M. on July 12, Hezbollah killed four Israel Defense Forces soldiers and kidnapped two. The army sent in troops to try to rescue the abducted soldiers, and an hour later, a tank hit a large mine and four more soldiers were killed. The Israel Air Force began bombing Lebanon.

But amid all this, Dan Halutz found time to call his branch of Bank Leumi and sell all his stocks.

The IDF Spokesman said that as soon as the incident began, the chief of staff rushed to army headquarters to manage the crisis. We all thought he had no time even to breathe. We all thought that during those critical hours, he was dealing only with the abducted soldiers. Thus it is hard to believe that during those hours, he had time to think about his petty personal financial affairs. That requires remarkable insensitivity.

But why be surprised? When he commanded the IAF, Halutz was asked how he feels as a pilot when he drops a bomb that accidentally kills children. He responded: "I feel a slight bump of the plane. After a moment, it passes. And that's it."

Did Halutz's stock sale involve insider information?

The Securities Law defines insider information as "information about developments in a company." It addresses cases such as a corporate executive who knows that his company is going to report a big loss in another few days. Should he sell stock in the company during that period, he could be charged with insider trading.

That, however, is not Halutz's situation. Halutz is not guilty of a crime. He did not exploit inside information as defined by the Securities Law, even though he seemingly did exploit such information in both the literal and the moral sense of the term.

After all, the ordinary Israeli investor did not know at noon on July 12 that two soldiers had been kidnapped and eight killed. Only that evening did the military censor permit publication of this information. But the chief of staff knew. He presumably also knew that he planned to advise the prime minister to approve a major bombing campaign in Lebanon later that day. And he surely expected Hezbollah to respond by launching rockets at the Galilee.

In other words, the chief of staff knew at noon that the economy's risk level had risen. And since the stock exchange's first reaction to bad security news is always to plunge, he preferred to sell his stocks before that happened.

Even under the most lenient possible interpretation, the chief of staff does not emerge well. Because even if he had always planned to sell those stocks that Wednesday, once the Hezbollah attack occurred, any reasonable person would have refrained from going ahead with the sale, for fear that he would be found out and publicly crucified. But Halutz was not afraid of that. He was more concerned about his money.

If Halutz had been more sensitive to proper public norms, he would not have been dealing with his investments at all. He would, of his own initiative, have transferred his portfolio to a blind trust - and thus, he would not have laid himself open to temptation.