Algorithmic Trading Firm Owner Convicted of Fraud, Receives Nine Months of Community Service
Adi Mordechai, the owner and manager of the algorithmic trading firm Investech Global, has been convicted of fraud and breach of trust following a plea agreement. The company's collapse resulted in approximately 34 million shekels in losses for investors. According to the indictment, Investech Global was presented as a firm engaged in algorithmic trading, where 70% of investor funds were to be deposited in a trust account with Union Bank, with only 30% used for trading activities. In reality, the indictment claims, clients were shown forged documents purporting to be trust confirmations from Union Bank. Funds intended for safekeeping were allegedly used to cover expenses and losses, while the company's true financial state was concealed.
When investors sought to verify their trust funds, they discovered the confirmations were fake and the money was not held as promised. The indictment details that around 2017, Investech faced financial difficulties. To continue operations and cover losses, Mordechai allegedly used all received funds, including those meant for safekeeping, to finance client reimbursements and increasingly risky investments without updating client accounts or disclosing the true investment status. In June 2018, shortly before the company's liquidation request, clients seeking confirmation of their secured funds were presented with fraudulent documents by Mordechai, falsely indicating their money was in trust at Union Bank.
The plea agreement approved by the court saw Mordechai convicted of obtaining property by fraud, corporate breach of trust, and related managerial offenses. His sentence includes nine months of community service, a suspended prison sentence, a 10,000 shekel fine, and 1 million shekels in compensation to the victims, to be distributed by the special administrators handling the recovery of funds. One victim, Dr. Yoav Bransky, stated that investors had saved for years for their children's apartments and did not intend to risk their money. Mordechai's lawyer, Nir Yaslovitz, stated that the agreement considered the company's financial crisis and that his client did not personally profit from the funds.
