Supreme Court Justices Neal Hendel, David Mintz, and George Karra have upheld the conviction of Nochi Dankner and lengthened his prison sentence to three years, in their dismissal of Dankner's appeal. Dankner was once the strongest person in Israel's economy. They also dismissed the appeal of investment manager Itay Strum's conviction in the Tel Aviv District Court in February 2012 for manipulating shares of IDB Holding. Strum's sentence was extended to two years. In an unusual development, the ruling was announced today by e-mail, not at the court itself.
Dankner and Strum are instructed to present themselves to begin serving their prison terms at 9:00 AM on October 2.
In their ruling, the justices stressed the trend towards giving stiffer sentences for economic crimes, particularly in securities offenses. They stated, "This trend reflects recognition of the great seriousness of economic offenses, the degree of sophistication involved in committing them, and the difficulty in exposing them, as well as the enormous damage they cause the Israeli economy and society in general. Economic crimes are usually committed by exploiting access to focuses of influence and power and by abusing the trust given to these criminals in management of other people's money, thereby causing damage that is no less than the conventional property offenses committed through the use of physical force."
According to the judgment, in view of the above, when securities fraud of exceptional seriousness in scale and the extent of harm to the values being protected is involved, "There is no alternative to intervening in the verdict of the District Court in the cases of Dankner and Strum."
Dankner and Strum appealed their sentences by the District Court. Judge Khaled Kabub sentenced Dankner to a two-year term and fined him NIS 800,000 and sentenced Strum to a one-year term and fined him NIS 500,000. The Supreme Court has now added one year to both men's terms.
"The only reasonable conclusion from the array of evidence considered above is that Dankner intended to influence the stock price and acted according to a plan devised together with Strum for this purpose. This conclusion is based on the evidence and the general picture it creates. The meaning is that the principal foundation disputed in this case - the mental foundation of Dankner - was proven by the prosecution beyond any reasonable doubt. This is the key to Dankner's conviction for both the crime of fraudulently exerting influence and the other offenses of fraud, reporting, and money laundering. At the same time, the foundations of these crimes are not the same and are not confined to proof of an intention to influence the share price. We will therefore now consider whether they exist," the judgment states.
The justices also wrote, "The background is the stock exchange. The stock exchange constitutes the main highway of the Israeli economy - an interurban highway that crosses the entire country. While there are other roads in Israel, the stock exchange has great power in the modern Israeli economy and affects the other lanes in the economy, including activity that is not traded on it. The essence of the crime is recognition that someone who exerts influence on the share price through fraud is liable to cause concrete damage in various circles like ripples in the pond of society."
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2018
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