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Israeli Court Hands Down Increased Sentence for Nochi Dankner in Securities Fraud Case

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In a strong rebuke to rampant corruption on both a personal and political scale, the Israeli Supreme Court on Wednesday increased the sentence of a man who was once known as one of Israel’s wealthiest people. Former IDB Holding Corporation controlling shareholder Nochi Dankner will now serve an extra three years in prison for securities fraud.

Dankner will begin serving his jail term on October 2 for the key role he played in a nefarious plot involving millions of dollars’ worth of fraudulent transactions in an attempt to influence the price of shares of IDB Holding which had experienced its share of financial woes, according to a Times of Israel report. Dankner had been given a two-year prison sentence in 2016.

The court also handed down a one-year suspended sentence and Dankner was mandated by the court to pay a fine of 800K shekels which is equivalent to $209,000.

Dankner did not work alone while crafting the illegal scheme.  Dankner’s co-defendant is Itay Strum, the owner of an asset management company geared for wealthy families. He was sentenced to a year in prison as well as a year’s suspended sentence and he is mandated to pay a monetary fine of 500K shekels which is equivalent to $130,760.

Both Dankner and Strum appealed their cases. Strum had his sentence increased to two years in jail.

The presiding judge, David Mintz, said in his ruling that the actions of Dankner and Strum had injured public confidence in the stock market, according to a TOI report. The judge added that a significant level of suspicion was raised that trading prices for securities do not accurately reflect the activity of the economy or the market in general.

The judges also stated that he believed that the initial sentence handed down to Dankner and Strum was not commensurate with the severity of the crimes, according to the TOI report.

“A review of the sentence showed that even though it used harsh language against the actions of Dankner and Strum, and even stressed the clear need to eliminate white collar crime in general and within the capital market specifically, this approach was not adequately expressed in the sentence and the punishment,” they wrote in their ruling.

Both men had been convicted for their involvement in insider trading in the run-up to a stock flotation for Dankner’s holdings company, IDB Group, in 2012.

Dankner had sunk into massive debt with the banks and had met a brick wall trying to raise cash or get further loans.

IDB took on millions of dollars in debt following a series of bad business deals. The courts wrested control of IDB from Dankner as a result.

Dankner, a favorite of Israel’s business community, was often credited with helping rescue Israel’s economy at the height of a Palestinian uprising. Under his leadership, IDB became Israel’s largest holding company and Dankner became a celebrity.

During his original trial, Dankner did not deny his “failures and poor decisions,” but tried unsuccessfully to convince the court that his actions had not been criminal. He tried to put much of the blame for IDB’s collapse on reforms in the cellular market introduced by Finance Minister Moshe Kahlon in his previous cabinet role of communications minister.

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