Bank Leumi hit by lawsuit from shareholders over U.S. tax settlement
(Reuters) – Shareholders in Israel’s Bank Leumi are seeking to file a class action lawsuit worth about 475 million shekels ($119 million) against the bank over its handling of a U.S. probe into alleged tax evasion, Bank Leumi said on Sunday.
Leumi, Israel’s second largest lender, said the lawsuit argues that the bank hurt its stock price when it announced in March 2012 that it was setting aside money for a possible settlement with the U.S. authorities over tax evasion.
Leumi shares lost about 29 percent in the five months following the announcement, hitting a low of 8.44 shekels in August 2012, although they have since rebounded. The stock was down 1.3 percent in midday trade in Tel Aviv at 13.13 shekels.
In a statement to the Tel Aviv Stock Exchange, Leumi said the suit alleges that “the conduct of the bank and the directors on matters regarding the investigation of U.S. authorities caused damage to the bank’s shareholders.”
The petitioner estimates the class action to be worth about 475 million shekels, Leumi said.
A Tel Aviv district court must approve whether it will allow the class action suit to proceed.
A Leumi spokesman said the bank was obligated to issue the statement under the rules of the bourse and declined to make any further comment.
Leumi last month agreed to pay $400 million to the U.S. Department of Justice and New York state to settle two separate investigations into whether the bank helped its U.S. clients evade taxes through its Swiss offices.
