Mei Eden's Giora Naftali Held for Insider Trading

Giora Naftali, one of the owners of Mei Eden, and three others were arrested yesterday for insider trading.

The Israel Securities Authority has been investigating the case for several months. The case concerns a deal made by Mei Eden with Danone in April 2003. The investigation found that Naftali, who held inside information concerning the Danone deal, gave the information to three other suspects in the case, in the knowledge that they would use it. The other suspects are Oded Neumark, Rami Scheinman and Dan Finkelstein. Neumark runs Ronopolidan which makes plastic packaging, and co-owns it with Naftali. The company is a supplier for Mei Eden.

Neumark is also Naftali's bridge partner, and the two are members of Israel's national bridge team. Scheinman is another member of the bridge team.

Finkelstein is the husband of Eti Finkelstein, who for a time was Mei Eden's advertising manager.

The Finkelsteins are suspected of buying Mei Eden shares while holding inside information, and thereby making a huge profit. They are suspected of committing serious offenses under the securities law, which have a maximum penalty of five years in jail.

The investigation showed that the Danone deal had a significant impact on Mei Eden.

The stock market stopped trading in the shares when the deal was announced and immediately afterwards the share price rose by more than 50 percent. Neumark and Scheinman are suspected of buying Mei Eden shares based on inside information and selling them after the sharp share price rise.

The four suspects were released on bail.