Sources close to the Israel Securities Authority assert that ousted Psagot Investment House Ltd. CEO Roy Vermus was a full partner in the plea bargain approved by State Prosecutor Moshe Lador and the Securities Authority. The sources say that Vermus knew all the details of the plea bargain, including the Securities Authority's demand that he and Psagot Securities CEO Shay Yaron be removed from their posts. The sources spoke in response to Vermus's appeal to the High Court of Justice against the plea bargain.
Under the plea bargain reached ten days ago, Psagot will pay a fine of NIS 150 million, remove Vermus and Yaron from their posts, and adopt a new corporate governance code. In exchange, the file against the company will be closed.
The sources at the Securities Authority also say that, in contrast to the prevailing impression that the State Prosecutor and the Securities Authority negotiated only with Psagot's buyer, Apax Partners, the negotiations were also with Psagot and its seller, York Capital Management LLC.
The sources add that Vermus has a major financial interest in Apax closing the deal to acquire the controlling interest in Psagot from York Capital, as well as a financial motive in the plea bargain, which is why he waited until the deal was closed and the plea bargain reached with the State Prosecutor and the Securities Authority before making his claims against the plea bargain.
The sources say that the Securities Authority did not compel Apax to remove Vermus, but that this was a voluntary act by Apax, which, at its own initiative asked the Securities Authority for its opinion about the conditions for closing the criminal case against the investment house that Apax was about to buy.
The sources say that the conditions set by the Securities Authority for closing the criminal case had been known for months. They said that since the criminal investigation against Psagot was opened in March, it was clear to all the parties involved with Psagot that Vermus' ouster was a condition for the regulator approving the sale of the investment house.
Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2010
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