Hebrew daily “Ma’ariv” correspondent Yehuda Sharoni reported today that IDF Chief of Staff Lt.-Gen. Dan Halutz sold his investment portfolio on the afternoon of July 12, the day the war in Lebanon began.
On that Wednesday morning, two IDF soldiers, Eldad Regev and Ehud (Udi) Goldwasser were kidnapped by Hizbullah inside Israel and eight IDF soldiers were killed in action. “Ma’ariv” claims that that afternoon, Halutz sold his investment portfolio at the Bank Leumi’s Lev Dizengoff branch. The portfolio was worth NIS 120,000.
Halutz said in response, “I lost NIS 25,000. It is not possible to link this with the war, because at that point I didn't know there would be a war.”
Tel Aviv Stock Exchange (TASE) stocks fell on the morning of July 12, and the leading indices fell by over 8% in the first two days of the war.
“Ma’ariv” says Bank Leumi declined to comment on the report.
An IDF spokesman said in response, “The Chief of Staff manages his family’s financial affairs as a private Israeli citizen. Any attempt to link his private affairs with the kidnapping of the soldiers is beneath contempt.”
While Halutz claims he did not know, at the time he sold his portfolio, that war would break out, examination of newspaper and website archives shows that, by around 13:00 that day, Halutz's threat in response to the abduction of the soldiers, to "put Lebanon back 20 years", was published. By the early afternoon, the IDF had commenced operations in Lebanon, and the Chief of Staff had ordered the call-up of a reserve division.
Arutz 7 reports that National Religious Party chairman Zevulun Orlev has approached the Attorney General with a demand that the affair of the Chief of Staff's sale of his portfolio should be investigated.
This afternoon, Halutz acknowledged that the facts of the sale of his portfolio, as reported, were correct. He added however that "I think this report is wicked and tendentious," and continued, "I don't know who is behind it. I too am a citizen of this country. I have my domestic affairs to run. I am not prepared for anyone to besmirch my name."
According to an Israel Securities Authority spokesperson, the Chief of Staff's instruction to his investment adviser to sell his portfolio a few hours after the IDF soldiers were abducted did not constitute a breach of the law on securities. The law on insider trading refers only to inside information about a company.
On July 12, 2006, the stock market began falling by up to 1% from the opening of trading, following rumors of a serious incident on the northern border. When reports began to be published about the abduction of the Israeli soldiers, shortly after 10 am, the negative trend on the stock market strengthened, and by 11am, the Tel Aviv 25 index was down about 2%.
As the day wore on, reports began to circulate of an IDF tank that had hit a mine and of heavy exchanges of fire in the area where the abduction took place. By 12:00 noon, when Halutz reportedly gave the instruction for his portfolio to be sold, the Tel Aviv 25 index was down 3%. In the afternoon, the media began reporting attacks on Lebanon by the IDF in response to the abduction, and the Tel Aviv 25 index closed the session 4.2% off.
Halutz's sale of his investment portfolio probably occasioned him a loss of about 1% of its value, assuming that the portfolio more or less reflected the performance of the Tel Aviv 25 index. At the time the portfolio was sold, the index was some 3% below the level it was at before the conflict in Lebanon began, while today it is just 2% below its opening level on July 12.
Published by Globes [online], Israel business news - www.globes.co.il - on August 15, 2006
Published by Globes [online], Israel business news - www.globes.co.il - on August 15, 2006
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