Investors in Salyes Scandal Can Now Choose How to Recover Lost Funds
More than two years after the Salyes financial scandal erupted, involving the disappearance of approximately 850 million shekels from investors' savings, a significant breakthrough has been reached toward recovering the lost money. Following a May 2026 settlement agreement between Salyes and the Phoenix insurance company, a new principles agreement has now been signed with investment funds marketed through the Finbert insurance agency, one of the entities implicated in the case. This agreement, pending court and investor approval, will allow investors to select between two recovery options for reclaiming part of their money.
The agreement was finalized after lengthy negotiations between the investors' legal representatives, attorneys Eitan Erez and Mor Ben Shoshan, and the funds' lawyers led by Alon Ron, with assistance from attorneys Orel Hasson, Oded Savorai, and Roy Saluki. It marks the first arrangement with one of the funds involved and aims to initiate practical restitution for investors who invested via Finbert. The two proposed options include a rapid liquidation route offering $27 million to investors for quicker partial repayment, and a longer-term plan focused on completing the projects funded, potentially yielding higher returns but over an extended period. Investors will vote on these options at a meeting convened after court approval.
The Salyes affair is considered the largest financial fraud uncovered in a regulated Israeli financial institution, with missing funds quadruple the scale of a previous major bank embezzlement. The investment house, controlled by the Goldberg and Toktali families, managed about 4.2 billion shekels, with 1.2 billion shekels in regular pension funds later acquired by Phoenix, expected to be returned to investors. The main issue concerns roughly 3 billion shekels managed in personal pension funds invested in foreign funds, many of which failed to meet regulatory standards and remain partially unlocated.
Following the scandal's exposure, the Capital Market Authority appointed CPA Effi Sandrov as the court-appointed manager to locate assets and recover funds. So far, only about 380 million shekels have been traced. Investigations revealed poor asset tracking, use of Excel files, lack of dedicated custody accounts for some investors, and improper use of some investors' funds to pay others. There are also concerns that some investments violated legal restrictions.
Legal disputes have also unfolded, with attorney Eitan Erez pushing for direct settlements with involved parties to expedite returns, opposed by the court-appointed manager who viewed this as circumventing official procedures. Additionally, the Capital Market Authority's handling of the case is under internal audit by the Ministry of Finance's internal auditor since June 2025, with no set timeline for completion.
The May 2026 settlement with Phoenix involved a payment of about 33.2 million shekels, representing 90% of the insurance coverage minus a deductible, to be held in a dedicated account for Salyes investors. This agreement does not preclude ongoing lawsuits against other parties, including former directors and officers. The new agreement with Finbert-marketed funds does not conclude the Salyes case but represents a further step toward returning some of the lost funds, offering investors a choice of recovery paths rather than waiting solely on legal rulings.
