Israeli bank to receive $140 million in deal with insurers
(Reuters) — Israel's Bank Hapoalim said Thursday it had reached a $140 million settlement with the insurers of former directors and officers involved in a multibillion-dollar U.S. tax evasion scandal and has dropped plans to sue them.
Hapoalim, one of Israel's two largest banks, paid U.S. authorities nearly $900 million in penalties in 2020 after pleading guilty to helping U.S. taxpayers hide more than $7.6 billion in some 5,500 undeclared Swiss and Israeli bank accounts between 2002 and 2014.
After the 2020 plea deal, to which Hapoalim's Swiss subsidiary was also a party, the bank established a committee headed by a retired Israeli Supreme Court justice to determine whether to sue its former directors and officers.
In a regulatory filing in Tel Aviv on Thursday, the bank said the committee and representatives of the directors and officers agreed that Hapoalim would be paid $140 million in return for dropping “all claims and demands” against the directors, officers and their insurers.
"After examining the liability of other third parties, the committee found no basis for recommending initiating legal proceedings or other measures towards them," the bank said.
It added that the officers did not act out of personal motive, conflict of interest, or in conscious violation of the law.
Hapoalim said it would soon file its settlement request with the Tel Aviv-Yafo District Court.
The bank also said it would pay 50 million shekels ($15.7 million) to settle a class-action lawsuit in the matter.
Hapoalim's main rival, Leumi, in 2014 agreed to pay $400 million to settle two separate investigations into whether it helped U.S. clients evade taxes. Mizrahi Tefahot Bank in 2019 paid $195 million to settle a five-year U.S. tax evasion investigation.
