Fallen Israeli Tycoon Dankner Set to Be Indicted for Securities Fraud

Nochi Dankner lost control of his business empire late last year and now is forbidden from leaving the country.

Ilan Assayag

The state prosecution rejected all of Nochi Dankner’s arguments and intends to indict the former chairman of IDB, Israel’s largest conglomerate, for stock fraud and a raft of economic crimes.

The prosecution’s tax and economics department called Dankner’s attorneys Tuesday to inform them that their client’s arguments during an April hearing had been totally rejected.

Dankner, who lost control of his business empire late last year, is suspected of stock fraud, filing misleading information in a prospectus, failing to meet reporting regulations and using funds illegally.

Similar notice was given to the lawyers of Itai Strum, a partner in ISP Financial Trading and IDB Holding who passed on his right to a pre-indictment hearing.

Dankner was interrogated by the Israel Securities Authority starting in November 2012 on suspicion of securities fraud in a 312-million-shekel ($91 million) stock sale that IDB had carried out that February. He was released after posting a 5-million-shekel bond but was forbidden from leaving the country.

Dankner, securities trader Adi Yehuda and Strum were accused of trading IDB shares before the stock offer in an attempt to improperly increase the company’s share price. By lifting the price, IDB would raise more money in the public offering. The pre-sale trades were called a “friend placement” because Dankner’s associates were the main buyers.

In July 2013, the ISA recommended that Dankner be indicted. The case was passed on to state prosecutors in Tel Aviv. In January this year, the prosecution said Dankner would be indicted pending the outcome of a hearing.