Bank Hapoalim has filed a massive $720 million suit against Bank
of America, Merrill Lynch and Countrywide over its losses in the U.S. subprime
crisis, alleging that the U.S. institutions misled and defrauded it.
Among Israel's financial institutions, Hapoalim suffered the
worst losses in the subprime crisis due to its investments in mortgage-backed
securities
Between 2005 and 2007, the bank, led by Shlomo Nehama and Zvi
Ziv, snapped up mortgage-backed securities in an attempt to meet its goal of a
15% return on equity by 2007.
By the end of that year, the bank had invested $3.65 billion in
such securities. But when the subprime crisis broke out in mid-2007, these
securities collapsed as American homebuyers defaulted on their mortgages.
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