Israeli attorney Moshe Strugano indicted in US for insider trading
US is seeking extradition of lawyer who has specialized in the creation of offshore companies; he could face up to 25 years in prison; he denies the allegations
Simona Weinglass is an investigative reporter at The Times of Israel.
An Israeli attorney who specialized in the creation of offshore companies has been indicted in the United States for alleged insider trading.
Moshe Strugano, 52, was charged on Wednesday with securities fraud and conspiracy to commit securities fraud in connection with the 2018 acquisition by Ormat Technologies Inc., an Israeli renewable energy company, of Idaho-based US Geothermal, Inc.
Strugano told The Times of Israel that he rejects the allegations.
According to the indictment, which was filed on April 14 but remained sealed until April 20, Strugano in 2017 received material non-public information from the head of Mergers and Acquisitions for Ormat, a large Israeli thermal energy company, about their upcoming acquisition of US Geothermal. He allegedly used this information to buy shares in US Geothermal before the acquisition was announced, then sold them immediately afterward, allegedly netting a $1.2 million profit.
US Attorney Damian Williams said in a press release: “As alleged, Moshe Strugano, a corporate lawyer, traded on nonpublic information for personal gain. His charged actions show a brazen disregard for laws intended to keep a level playing field for investors.”
According to the indictment, from September 2017 and January 2018, Strugano allegedly purchased over $2.7 million in US Geothermal shares, acquiring a 3.8 percent equity stake in the company.
A parallel lawsuit was announced Wednesday by the Securities and Exchange Commission. The defendants are Strugano and his friend Rinat Gazit, whose name is not mentioned in the Department of Justice indictment. Both were charged by the Securities and Exchange Commission with insider trading.
The SEC complaint describes Gazit and Strugano as “close, personal friends” who frequently socialized in person as well as over WhatsApp and email, talking about “their families, travel, and business opportunities.” In 2017, Gazit was in charge of mergers and acquisitions at Ornat.
On December 19, 2017, the day that Ornat decided to buy US Geothermal, Gazit allegedly sent Strugano a message saying “We were with [Gazit’s child] at Peter Pan. Great show! Go with the kids.”
According to the SEC complaint, this WhatsApp message was actually a coded message “alerting Strugano that Ormat’s board had approved the acquisition and that he should starting buying US Geothermal securities.”
Over the next several months, Strugano allegedly bought millions of dollars worth of US Geothermal shares.
If convicted, he faces up to a maximum of 25 years in prison, a source familiar with sentencing guidelines told The Times of Israel, although insider trading sentences generally do not exceed a few years. The US Justice Department announced on April 20 that an arrest warrant had been issued and that it is seeking Strugano’s extradition.
Gazit did not respond by publication date to an email addressed to her at one of the companies where she is a director.
In an April 20 email to The Times of Israel, Strugano said he was surprised to hear about the US Department of Justice allegations.
“We were surprised to hear the news that was published. We reject the allegations that have no evidence whatsoever and are all strange speculations. Strugano & Co will continue to serve its clients for the best of the clients.”
The Times of Israel wrote in a July 2020 that Strugano had been a client of the offshore formation company Mossack Fonseca, as evidenced by documents in the Panama Papers leak. In January 2021, Strugano sued Times of Israel editor David Horovitz and reporter Simona Weinglass over the article, which described him as a prominent operative in Israel’s largely fraudulent binary options industry. Strugano has never been indicted for alleged wrongdoing in connection with his binary options activity.
In his January 2021 complaint, Strugano described the Times of Israel article as “false, slanderous and disparaging.” The Times of Israel has argued in its defense that the article is factual and truthful. The case is ongoing.
