The global financial crisis has been bad enough for Israelis counting on a healthy pension income after retirement. Many pension funds holding their savings had invested heavily in Israeli companies that are now reeling from the collapse of real estate markets abroad.
Now there's more alarming news for Israel's beleaguered savers: Harel Insurance Investments & Financial Services said some of its subsidiaries had invested nearly $11 million belonging to Harel's pension fund clients in an American fund that, in turn, had sunk money into financial instruments linked to disgraced Wall Street trader Bernard Madoff. In a statement to the Tel Aviv stock exchange, Harel said the unnamed American fund could not estimate the potential damage from its $7.5 billion in investments linked to Madoff. U.S. prosecutors and regulators have accused Madoff, a former chairman of the Nasdaq stock market, of masterminding a $50-billion fraud through his investment advisory business. He was arrested Thursday.
--Richard Boudreaux in Jerusalem