Following "Globes" reports, the ISA is investigating illegal commissions.
Following an expose' in "Globes" G magazine, the Israel Securities Authority has launched an investigation into Excellence Investments Ltd. (TASE: EXCE). The investigation will look into suspicions of illegal brokerage commissions in the company's mutual funds. Yesterday, Securities Authority investigators questioned executives at the company's offices including the VP of Mutual Funds, and VP of Brokerage Services.
In a "Globes" investigative report two months ago, it was revealed that Excellence charged NIS 4 for each transaction in mutual funds which it managed. This amount went to Excellence, as it serves as a broker for its own funds. However, some of its brokerage service clients paid significantly lower fees. The law prohibits investment houses which provide brokerage services from charging managed funds higher fees than those paid by other clients, with the exception of extraordinarily large transactions.
"Globes" also uncovered that Excellence was transferring nearly 40% of the commissions from transactions in a certain fund, to the broker of the engagement between Excellence and that fund.
Published by Globes [online], Israel business news - www.globes.co.il - on April 18, 2007
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