The Tel Aviv District Court today (Sunday) convicted former Minister Moshe Kahlon, according to his confession, of a reporting offense under the Securities Law while he served as chairman of the public company Yount Credit - as part of a plea agreement between the parties.
According to the indictment, filed by Attorneys Yossi Tzadok, Dror Levy and Dana Shtrum from the Securities Department of the Taxation and Economic Affairs Attorney's Office, after being informed at the beginning of 2022 about material irregularities at the Nazareth branch, Kahlon failed to act to bring the full information to the attention of the company's board of directors and the public, as required by the Securities Law.
Only about five months after the findings were presented to Kahlon were they presented to the board of directors, and the company reported the suspicions to the public.
Shortly after the revelation, Kahlon resigned from his position.
Judge Dana Amir of the Economic Department of the Tel Aviv District Court convicted Kahlon, in accordance with his confession, of a reporting offense under the Securities Law.
In accordance with the plea agreement, the parties requested that he be sentenced to suspended prison, a fine of 180,000 shekels, and a restriction on his term as an officer in a public company for 18 months from the date of sentencing.
As part of the arguments for the sentence, the prosecution stated that the message emerging from the conviction is clear and unambiguous, according to which senior officers in public companies not only owe a duty of loyalty to the company and its good as they perceive it, but also have a duty towards the public of investors and shareholders, who rely on the information published by the company in order to make informed investment decisions.
In addition, "along with the sanctions and the associated term limit, the conviction sends a clear message both to officers in public companies and to the investing public, that the law protects the interests of investors and that violating duties towards them entails liability and punishment.".
The investigation was conducted by the Investigations, Intelligence and Trade Control Department at the Securities and Exchange Commission.
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