FIGHTING FOR THE PUBLIC AGAINST CORPORATE GOLIATHS

Attorney Ilan Verdnikov never set out to become a lawyer. His original ambition was to be an analyst in the capital markets. But fate and a deep-rooted sense of justice led him instead to the legal frontlines where he now leads class action lawsuits — legal claims on behalf of people harmed by the unlawful actions of large corporations seeking economic gain. To date, his work in this area has resulted in compensation totalling more than 110 million shekels.

With hindsight, life prepared him for this path. Born in Haifa 39 years ago, Verdnikov is the eldest son in a family which experienced hardship firsthand. His father, Yigal, a combat veteran of the 1973 Yom Kippur War, suffered severe post-traumatic stress disorder (PTSD).

"Looking back, I realize how much that influenced me," says Verdnikov. "My father was severely disabled by his PTSD. He managed to build a family, but he spent years fighting a frustrating and demoralizing battle for recognition of his illness."

Israel's Defense Ministry initially granted Yigal only 20 percent disability and he battled them for years. "One lawyer failed him, then another," says Verdnikov. "It was only in 2001, with the help of a third attorney, that his disability level was recognized at 51 percent. That lifted our
family from poverty into the middle class."

Watching his father wage his relentless legal battle, keep going and push through to the end made a deep impression. This experience, he says, motivated him to become a lawyer who battles powerful corporations on behalf of the common man and woman.

Challenging El Al's Wartime Monopoly — Setting a Precedent for Future Deterrence
Verdnikov's most recent class action lawsuit, filed this year, affects hundreds of thousands of Israelis. It is against El Al Israel Airlines for their pricing practices during the current war against Hamas.

"When foreign airlines halted service to Israel because of the war, El Al was left with a monopoly on many routes," explains Verdnikov. "For many travelers, El Al became the sole carrier, and the company, in my view, abused their monopoly by unfairly raising ticket prices." The result? El Al's profits skyrocketed fivefold, reaching over half a billion dollars in 2024 alone. "The public, who had no alternative to paying these inflated prices, clearly lost out," he says.

El Al is expected to submit its defense to the court in early 2026. In a report to the stock exchange on June 11, 2025, the company stated that, together with its legal advisors, it will review the claims once they are formally served and submit a response to the court. At this stage, the company is unable to assess the likelihood of the claim's success.

"It infuriates me when Goliath crushes David — when the powerful and wealthy exploit their strength and resources to harm ordinary consumers for their own gain," says Verdnikov. "It's neither fair nor just. El Al and its CEO have given various explanations to justify the fare increases. They've claimed, for example, that operational costs have risen. But when I investigated, I found that their costs had actually gone down."

The lawsuit, filed by Dr. Tal Rotman and supported by an expert opinion from Prof. David Gilo, former chair of the Israeli Antitrust Authority, is currently under legal review. Should it succeed, many passengers will be entitled to compensation, according to a mechanism determined by the court. Verdnikov believes that such an outcome may deter future legal violations.

The Case That Launched a Legal Career: Bezeq vs. Elovitch
Verdnikov's self-imposed mission to defend members of the public evolved gradually. He came to understand his calling through various stages of his career.

He earned his first degree in law and economics from the University of Haifa, and began work at a prominent law firm specializing in taxation. He found himself, however, increasingly drawn to the world of capital markets. A key interest became analysis of financial statements in search of red flags — especially, the uncovering of what the shareholders may be trying to conceal. This included scrutinizing related-party transactions, which are often inadequately disclosed or potentially noncompliant with legal standards. He also focused on identifying signs of financial distress and manipulative practices designed to mislead investors.

With this strong interest in financial statements, Verdnikov chose to work as a capital markets analyst after he passed his bar exam. He was, by this time, also managing his own investment portfolio, and Bezeq, Israel's largest telecom company, was among the standout stocks he purchased. As an investor, he noticed that the company generated significant profits (around 2 billion shekels a year) until 2010, when it was acquired by businessman Shaul Elovitch through loans totalling several billion shekels.

This became Verdnikov's career-defining case. He recalls how he discovered that "the company was distributing dividends to shareholders, but to do so, it was taking out loans, concealing the link between those loans and the dividends. As I dug deeper, I realized that without those dividends, Elovitch wouldn't be able to repay the loans he'd taken to acquire control of Bezeq. I argued that he'd essentially 'milked' the company, inflicting damage amounting to billions of shekels, and turning what had once been a profitable, stable enterprise into one that was heavily leveraged."

Elovitch and Bezeq asserted that there was no conflict of interest and the company's board had exercised sound business judgment in taking out loans and distributing dividends. These actions, they argued, served the best interests of both Bezeq and its shareholders.

Verdnikov was, at the time, a newly licensed attorney, fresh out of law school, but that did not stop him. He consulted with experts, worked relentlessly on the case for four months, and then filed his first lawsuit — a derivative action, in which shareholders seek to hold accountable controlling parties or company officers for harm caused the company.

"Was I intimidated?" he says. "No. I identified clear legal violations, consulted with experts and assembled ample evidence. What could go wrong? I was like an entrepreneur who sees a problem and takes action to address it. To be an entrepreneur, you need optimism (which I inherited from my mother), self-confidence, willingness to take significant risks, ability to endure years of uncertainty and, above all, to keep fighting for what you believe in. I also had strong faith in the new economic court. It was bold, but I felt I could and should stand up to Bezeq and its investors."

"My Moment of Truth" — Verdnikov on Fighting Economic Crime
"At one point, after a brutal loss, I was asked whether I wanted to continue the legal battle against Elovitch," recalls Verdnikov. "It was my moment of truth. I replied: 'Of course I'm continuing!' At the same time, I was already preparing another legal action against Elovitch — this time, a class action on behalf of Bezeq's investors. It's that decision I'm most proud of. These moments of crisis truly test leadership and character — to take a hit but still move forward."

Verdnikov identified that Bezeq had failed to adequately disclose the impact of the wholesale market reform led by the Ministry of Communications. While Bezeq's reports to shareholders suggested that the reform could be beneficial, a professional report submitted to the Ministry and Bezeq indicated it would cost the company approximately 1.2 billion shekels. Bezeq, in fact, filed a petition against the Ministry, claiming the reform would seriously harm its business and should be revoked. The question remained: would the reform help or harm Bezeq? This class action was approved by the court in 2018. In 2023, a settlement was reached whereby the defendants paid 75 million shekels in compensation. "I'm proud to have made them pay," says Verdnikov. "Large corporations harm the public. We made Bezeq return the money to the people."

Maximizing Compensation
The lawsuits which Ilan Verdnikov filed against Shaul Elovitch concerning the damage inflicted on Bezeq and its public shareholders preceded by nearly five years the criminal proceedings initiated against him by the Israel Securities Authority, proceedings eventually launched in connection with the Bezeq-YES transaction. Elovitch still enjoys presumption of innocence, as no conviction has yet been made.

"Elovitch is currently standing trial for a deal executed in 2015," notes Verdnikov. "Had the derivative lawsuit I filed been accepted in 2014, it's likely he would have lost control of Bezeq and been unable to complete the damaging transaction that is now the subject of criminal allegations. I was like the child who declared: 'The emperor has no clothes!' It took the system five years to realize I was right."

A. Dori: a Victory Without Full Justice
Another of Verdnikov's major battles came in a class action against construction giant A. Dori. It, too, ended successfully, securing compensation for investors. For Verdnikov, however, it fell short of delivering full justice, particularly in terms of public enforcement. As with Bezeq, Verdnikov discovered that A. Dori's financial statements did not accurately reflect the company's true financial situation. It painted an overly optimistic picture while the company was sinking deeper into losses and debt.

As a large and influential company, Dori was represented by top-tier law firms. Verdnikov relates that in 2016 these attorneys offered a 15-million-shekel settlement. He and the other plaintiff attorneys declined it. In 2018, the offer was raised to 20 million, and again rejected. The legal battle continued as Verdnikov and his colleagues tried to maximize public compensation. The court eventually approved a 34-million-shekel settlement, to be distributed this year.

"On one hand, we won and the compensation is substantial," says Verdnikov. "As plaintiff attorneys, we did everything in our power to maximize compensation. Ultimately, we're not doing this for ourselves, but to return as much money as possible to the victims. But on the other hand, the lawsuit didn't lead to criminal sanctions against the company, and the Securities Authority failed to initiate criminal proceedings in real time. Only after we won the case were small fines imposed on the auditor and a few executives. That's not real deterrence."

Economic Crime Pays in Israel
Verdnikov's power as a legal advocate is his ability to detect sophisticated violations, assemble ironclad evidence and persevere through years of litigation. "What sets me apart is that I can connect the legal dots," he says. "I use my knowledge and experience in finance and law to serve the public good. But, unfortunately, enforcement in Israel is often too soft, especially when it comes to powerful interests."

Beyond the courtroom, Verdnikov is a legal educator. He teaches graduate courses in business and law at Bar Ilan, Tel Aviv University and others. One of his most popular courses is entitled Is Crime Profitable? which, with his wife Jenny, he recently turned into a podcast (available on YouTube and other platforms). "My master's thesis looked into why public agencies fail to protect the public," he notes. "The podcast raises awareness about economic crime, and helps people recognize and avoid it."

The Future of Class Actions in Israel
Asked how he sees the future of class action litigation in Israel, Verdnikov sounds a note of warning. "It's becoming harder to file such suits," he says. "The courts are reducing incentives for plaintiff attorneys. This is a mistake."

In a perfect world, he continues there would be no need for class actions. He points to European countries, where class actions are rare because regulatory enforcement is strong and consistent. "In Israel, enforcement is selective," he notes. "This is why class actions are crucial. They hold corporations accountable and compensate their victims."

A Billion Shekels Returned to the Public
Over the past decade, class actions in Israel have returned close to a billion shekels to the public, says Verdnikov. "Unfortunately, media attention too often focuses on lawyers' fees instead of the social value that these lawsuits generate. Class action lawyers take enormous risks, and in the US they typically receive 25 to 30 percent of the compensation. In Israel, that figure is around 5 to 15 percent. These cases take years and they're high risk, but they protect the public and hold those in power accountable. If more people knew the extent and damage of economic crimes, fewer would fall victim to them.

"That's why my podcast is so important. It raises public awareness about profitable economic crimes and gives listeners practical tools to protect themselves. When I look at the bottom line — when it takes the courts ten years to hand down rulings, that penalties are too lenient and that people walk free after serving only a year or two — I'm forced to conclude, sadly: in Israel, economic crime pays.

"The lectures, the podcast and my legal battles in court are how I fight back. It's my way of combating economic crime and creating real, positive value for the public."

In collaboration with Attorney Ilan Verdnikov

To Ilan Verdnikov's website

Ilan Verdnokov's YouTube channel