Former IDF Chief of Staff Lt.-Gen. (res.) Dan Halutz and Bank Leumi (TASE: LUMI) have settled their legal dispute. Bank Leumi will donate NIS 150,000 to community welfare programs and/or an organization named by Halutz and approved by the bank. The bank will not object to the donation, as stipulated in the agreement, except under extraordinary circumstances.
Bank Leumi added that it regretted that confidential banking information relating to Halutz was partially, selectively and misleadingly disclosed in a way that caused unjustified harm to Halutz and his reputation. The bank said that although an investigation that it conducted failed to find the source of the leak to the media from among its employees, it apologized to Halutz for the incident.
Halutz was reported about to sue the bank, after negotiations between the parties broke down. Over the past two weeks, the parties held quiet negotiations, during which Halutz’s lawyers sought compensation for distress caused by the leak to Hebrew daily “Ma’ariv” about the sale of Halutz’s securities portfolio on the day the second Lebanon war broke out. The lawyers initially asked for NIS 700,000, and, after the bank rejected the initial demand, they lowered it to NIS 400,000, which the bank also rejected.
Although Bank Leumi believed that it was not responsible for the leak, it proposed a compromise as “a gesture of good faith” to donate to the Fund for Strengthening Israel’s Defense an amount to be agreed by the parties. The bank claims that Halutz rejected the offer, and demanded that the money to be paid into his account.
Halutz’s distress was caused by a leak to the media about transactions carried out in his personal account. In August 2006, “Ma’ariv” reported that on the first day of the war, in the afternoon after two IDF soldiers were kidnapped by Hizbullah and the IDF was preparing for combat operations, Halutz spoke with his investment advisor at a Bank Leumi branch, and instructed him to sell his NIS 150,000 investment portfolio. Halutz lost heavily on the sale.
Bank Leumi subsequently hired an outside investigative agency to investigate the incident. The bank concluded that it was not the source of the leak. The investigation, which the bank called thorough and in-depth, questioned all employees who had access to the information. The investigation included polygraph tests conducted by a specialist firm.
Published by Globes [online], Israel business news - www.globes.co.il - on March 12, 2007
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