The bank was founded in 1931 as Alexander Eliash & Co. Ltd. By Alexander Eliash (1896-1967), originally from Uman in Ukraine. Eliash immigrated to the Land of Israel in 1926, where he served as president of B’nai B’rith and as a trustee for American individuals and companies supporting the Jewish community.
The bank which he founded served, inter alia, the British Mandate Government’s senior officers and some of Jerusalem’s richest families. In 1965, the bank was sold to a group of Israeli and American investors. Its name was changed to Otsar Ha’hisahon, and it turned its focus to the Jewish Orthodox community.
In 1978, Otsar Ha’hisahon – then a small financial institution in Jerusalem controlled by Yehoshua Halperin, Moshe Stern and Gdalya Buchbinder – became North American Bank. Most of its shareholders and members of the board were Jews residing outside Israel, some of them very well known businessmen, such as Nissim Gaon and Joe Nakash.
In August 1985, the Bank of Israel took over North American Bank and nominated an administrator, since the bank was on the verge of collapse. It continued to operate for two more years, until it was liquidated in October 31, 1987, due to insolvency.
Later on, it was discovered that the bank’s management and legal advisors committed fraud and forgery before the Bank of Israel took over. They were convicted and sentenced to a number of years in prison. In addition, the Official Receiver, which served as the bank’s liquidator, filed a large scale lawsuit against the bank’s former members of the board, claiming that they had violated their duty to supervise the bank’s activities. In a groundbreaking verdict on the issue of directors’ liability, the court sided with the plaintiff and ordered the defendants to repay hundreds of millions of shekels, although – in reality – only a few millions were collected.
(From Barlev collection of Securities Certificates)