2024 was supposed to be a special year for the Goldberg family. Exactly fifty years ago, in 1974, Shimon Goldberg founded FMR, which became the dominant company in providing trading systems to financial institutions in Israel, including operations and back-office services, the technological backbone of institutions' financial activities. A year later, he was joined by Avinoam Tokatli, who ran the Aryeh Insurance Company, which was founded by his father Yehuda Tokatli and which was later sold to Clal Insurance Company. Since then, the Goldberg and Tokatli families have owned 50% of FMR.
But in the past few months, the two families, who have always stayed out of the public eye, have been hit with unfavorable publicity, after the capital markets, the Savings and Insurance Authority and the Israel Securities Authority opened an investigation into the matter. Violations amounting to tens of millions of shekels in another company they jointly own, the savings fund management company Slice.
Slice is 51% owned by the Goldberg family. Assaf Goldberg, Shimon Goldberg's son, was CEO when the case broke, while he and his other son, Shai, were directors of the company.
Regulators' suspicions about irregularities at Slice are so strong that at the end of last year the Capital Markets, Insurance and Savings Authority decided to take the management of the company out of the hands of the Goldberg family (until the decision of the company's board of directors to withdraw management of the company from the hands of the Goldberg family), replacing Assaf Goldberg as CEO. It did not work) and appointed a special manager to arrange her affairs. The authority chose Efi Senderov, CEO of Amitim Retirement Funds, for this mission.
The Tokatli family's ownership in FMR is currently identified with Danny Tokatli, Avinoam's son, known as a venture capital and real estate investor, and a member of a group of businessmen close to opposition leader Yair Lapid. Danny Tokatli started his career in investment companies in the United States, where he made his initial fortune. Later, upon his return to Israel, he entered into several investments, including co-founding Magma Venture Partners (formerly known as Magnum) with Zvi Limon, Ron Zuckerman and Shaul Shani. The fund had a very successful exit with semiconductor company DSPG. Another investment that brought great success for Tokatli was in the real estate company BRAC Capital, headed by his friend Shimon Weintraub.
In mid-2010, FMR decided to apply the knowledge I had gained during forty years of working in provident fund management. The company says that the accounts of about 750,000 savers are managed through its systems, and the main client is additional savings funds.
Looking for growth
According to market sources, the move to savings funds came after changes in the market that affected the forced migration bulletin. The services it sold to financial institutions still made a lot of money for the Goldberg and Tokatli families, but a kind of pincer movement sent them looking for additional sources of income.
“They have gradually found themselves in a more competitive position than in the past, for two reasons,” says one market player. “The first is that the number of members of the exchange has decreased due to mergers in the sector. This is no longer a growing business for FMR. The second reason is that there are two other alternatives for providing operations services, and Psagot, for example, and Altshuler Shaham, who became a member of the exchange in Last September, to competitors, so the combination of exchange members who do not necessarily go with them, and mergers that reduced the number of potential customers, creates a situation in which they looked for other areas of growth.”
Obviously, this is why the Goldberg and Tokatli families became not just providers of savings fund operations, but also producers. They founded Kal Gemel in 2012, but the big leap came in 2020, when they changed the name to Slice and moved into alternative investments. According to the financial statement published by the private manager, the controlling shareholders in Slice are Shimon Goldberg, who owns 25%, and his sons Assaf and Shai, who each own 13%. The Tokatli family owns the remaining 49%.
In 2021, the two families took another step in expanding their business when they created Fair, a digital platform to compare and invest in mutual funds without paying a direct commission. The gallery's business model is based on the distribution commission paid by the mutual fund companies, not by the client.
Less than four years after aggressively entering the money management market, the result was certainly not what the Goldberg and Tokatli families had hoped for: almost daily negative coverage in the financial press and media and the de facto loss of management control over their savings funds. A company that specializes in managing personal funds (IRA). They certainly did not expect a situation in which Slice's appointed private manager would ask the court to approve the sale of funds to competitors, and even halt the withdrawal of funds by savers for six months (so far), and file a police complaint against Slice by the Capital Markets, Insurance and Savings Authority.
different world
At the end of last month, the special manager submitted a written statement to the court explaining his findings so far, including errors in calculating returns on investment paths, and failure to return excess direct cash expenditures to savers’ accounts. This is despite the fact that it announced that it did so after the Capital Markets, Insurance and Savings Authority obliged it to return the sum of NIS 2 million to savers (Slice claims that the funds in question were kept separately for savers).
It also became clear to the private manager that for several years no reconciliation had been made between the money received by the fund management company and the investments, and that the discrepancies amounted to millions of shekels.
In the examination conducted by the Special Director and the Capital Markets, Insurance and Savings Authority, the cause of the violations will of course be investigated, and if administrative deficiencies are found, those who managed the company and worked as employees of the company will be investigated. It must be made clear that if it turns out that the cause of the violations is a lack of supervision, this will be a lighter type of liability, but if the damage occurred as a result of negligence, or worse, knowingly, then the situation is liable. To be different.
“I don’t know to what extent they have taken into account the ramifications of being a regulated entity that is in the public domain and provides services directly to end customers and not just to members of the exchange, but it is a completely different world,” the capital market source says. “We're talking about people who were very careful not to interact with the media, and now they're being excluded from anonymity because of what happened at Slice.”
Goldberg Family: Report suspicions immediately
The Goldberg family said in a statement: “Shai Goldberg and his father Shimon Goldberg, who founded FMR, have invested all their efforts and experience in proving computing services through the company to leading financial entities in the capital market. They have done so honestly and without any doubt.” For nearly 50 years.
“When Shimon and Shai discovered suspicions of shortcomings in the Slice Provident Fund Company, which operates in a different market than the FMR market, they immediately reported them to the relevant authorities and welcomed the appointment of the authorized manager. They will continue to cooperate with the authorized manager and his work, all with the aim of protecting savers’ investments.” .
Globes approached Dani Tokatli, but there was no response.
Published by Globes, Israel Business News – en.globes.co.il – on May 12, 2024.
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