Tel Aviv Court Rejects Partial Settlement in Pinbot Insurance Fund Scandal

The Tel Aviv District Court on Monday rejected a request by some partners of the Pinbot insurance agency to arrange a settlement with the funds marketed by the agency. The court ruled that there is no legal basis to impose such a settlement on dissenting partners without formal approval of a settlement plan. The disputed settlement was negotiated directly between attorneys representing some Pinbot partners and the funds, contrary to the position of the court-appointed trustee, Effi Sandrov.

Judge Sigal Yaakobi emphasized that only the authorized trustee may propose a settlement plan and recommended that the trustee review the proposed agreement in cooperation with the involved attorneys. The settlement would have allowed Pinbot savers to choose between recovering about 51% of their investment within 18 months or continuing investment management in Georgia for 5 to 6 years, with both options requiring waivers of future claims against the settlement parties.

The Pinbot case surfaced at the end of 2023 after serious financial mismanagement was uncovered involving nearly one billion shekels raised from savers through pension and provident funds. These funds were illegally transferred to foreign funds, with approximately 300 million shekels still unaccounted for. Since the scandal broke, savers seeking to withdraw their money have not been reimbursed.

The court is expected to rule soon on a settlement plan submitted by the trustee. Additionally, a hearing is scheduled today to consider the trustee's request to fine senior Pinbot officials hundreds of thousands of shekels for allegedly withdrawing savers' funds in violation of a court order.