Red-faced Leumi Investigating Possible Leak in Halutz Affair

Did the information that the chief of staff shed his stocks mere hours before the war originate at the bank?

Bank Leumi (TASE: LUMI) is writhing over the leak of Chief of Staff Dan Halutz's private affairs on the day the war with Lebanon broke out.

The enter political establishment is in an uproar over the revelation that three hours after two Israeli soldiers were kidnapped, triggering the war, the top commander of the army found a moment to call the bank and order it to sell his portfolio. Reporter Yehuda Sharoni of Maariv broke the story, and the question is how the media got ahold of the details.

The bank's top brass has ordered an investigation into the staff, to elucidate if the leak originated at Leumi.

Shortly after Halutz gave the order on July 12, 2006 to sell his NIS 120,000 worth of shares, war broke out. While top army officers and not a few members of the public are calling for his head, the chief of staff is adamant that he did no wrong.

The Israel Securities Authority clarifies that there is no law prohibiting the top soldier from running his own portfolio. Insider information under Israeli law is confined to traded companies, not to estimations about the general situation. But calls are mounting for Halutz to step down over the appearance of dereliction of duty.

Halutz told Maariv that the selloff had nothing to do with imminent war, which he said he knew nothing about: he had already lost NIS 25,000, he explained, and accused the paper of impropriety in linking his private affairs to the abduction of the soldiers. He also called the report malicious, biased, and motivated by vested interests.