Latest Updates /  Capital Markets

Dr. Zvi Gabbay, Partner and Head of the Capital Markets Securities Department at Barnea was interviewed by several media, following the conviction of Nochi Dankner for securities fraud. Dankner formerly controlled the IDB group and was one of the most powerful men in the Israel economy. Zvi noted that the verdict and its media coverage greatly contribute to the creation of a deterrent power of the Israeli Securities Authority and the prosecutor's office.

An article by Adv. Zvi Gabbay and Andrey Yanai on the proposal to reconsider the activist regulatory model of the Israel Securities Authority applied to the public companies, allowing them to enjoy wider business and legal maneuvering room.

Dr. Zvi Gabbay, Head of the Capital Markets Department at Barnea - Legal Acrobatics "In Praise of the Probability Test" - Comments and Criticism was mentioned in the recent ruling of the Supreme Court relating to the question of what knowledge is required to establish a Reporting Duty for a Company. Dr. Zvi Gabbay’s article critically examined the Africa Israel ruling, which was adopted by the Economic Department of the Tel Aviv District Court, stating that the relevant test for deciding whether the information fits into the definition of "inside information" is the "test of expectation". The Court had to decide whether the information during negotiations for a transaction had matured into "inside information" (which prevents a person having such information from trading securities, for as long as such information has not been reported to the investing public). The "test of expectation" used by the judges of the Economic Department provides that in order to determine whether a particular event in the life of the corporation is material, the probability of the event should be weighed against its expected impact on the corporation. In other words, the stronger the anticipated event is for the corporation and its business, the more information about it will be material, even if the probability of occurrence of the event is low, and vice versa. In his article, Dr. Zvi Gabbay highlighted the problem of "excessive regulation" taking place in the market, and the need to equip the capital market with practical tools that will enable the supervised bodies to deal appropriately with the reporting duties imposed on them by the Securities Authority. The solution to this issue, according to Dr. Zvi Gabbay, lies in the development of the "agreement in principle" test. According to this test, information on a transaction will be material and must be reported only when agreement has been reached between the parties with regard to the main details of the transaction. The "agreement in principle" test will provide the supervised bodies with an easier, simpler, and more convenient tool for assessing the information related to their ongoing activity, while increasing certainty in the market.

Following the suspicions that Likud minister, Haim Katz, used insider information for financial gain, Dr. Zvi Gabbay was interviewed by Reshet B Radio station, at London Kirshenbaum, a current affairs news show on Israeli Channel 10, and by Globes. 

An article by Adv. Zvi Gabbay that critiques the Israeli SEC's staff position paper it issued and which details actions which may be considered as "Trading Fraud". A short comparative review which was mentioned in the article indicates that the Israeli SEC’s staff position paper is problematic, hence it does not provide clear guidelines to the players involved in trading. Similar positions issued in other countries lean towards providing guiding principles, as opposed to a detailed specific list of actions, as indicating fraudulent trading.

Dr. Zvi Gabbay, who was previously head of administrative enforcement at the Israel Securities Authority, will be joining our firm with five lawyers from his team. Micky Barnea commented to Globes regarding this expansion "together we create integrated capabilities that can handle a variety of challenges that the world of public companies and financial regulation present".

An article by Adv. Zvi Gabbay that examines the willingness of the Israeli SEC to sign an enforcement agreement without a confession with regards to the offence by a violator and without such violator taking responsibility for such offence. Additionally, the article states that comparing the administrative enforcement with the criteria of criminal enforcement would not necessarily be overlapping, and one not should expect a correlation between them. Moreover, the article compares both the Israeli enforcement agreement policy and the United States enforcement agreement policy. The conclusion is that enforcement agreements without confession are not illegitimate and the intervention in the SEC's judgement will be acceptable only when there is a fundamental flaw in the enforcement agreement. 

The prestigious Bloomberg BNA’s World Securities Law Report published  an article by Ron Shuhatovich discussing the recent order of the ISA regarding the accredited investor definition.

An article by Adv. Zvi Gabbay that discusses the need to examine Corporate Governance in terms of its substantiveness and not just through a procedural form. The article reviews the development of Corporate Governance from the time it was adopted in Israel in the mid-2000’s to the present and delineates general principles for further future developments, while highlighting the integration of tests of substantiveness that would allow the implementation of Corporate Governance in an optimal manner.

In order to assist investors in Israel and abroad make prudent and informed investment decisions, the TASE concluded an agreement with Edison Investment Research to promote a unique model that has not yet been tried in the Israeli capital market. The new model involves Edison doing independent analysis for high-tech and biomedical companies traded on the TASE. This venture will be partially sponsored by the Israeli Stock Exchange.

As an expert in Capital Markets, Micky Barnea was interviewed exclusively by Globes regarding the TASE "poor year" in 2015. In the interview, Micky describes the reasons for the situation: stifling regulation, low turnover, high costs, and describes what he thinks TASE should do in order to attract new companies to TASE.  

Ariella Dreyfuss Adv. published an article in the leading legal English website "The Lawyer" discussing the new law in Israel relating to alternative means of raising funds. The goal of the law is to assist small Israeli companies in their efforts to raise funds through the social phenomena of crowdfunding, and the establishment of high-tech funds to be traded on a new index on the Tel Aviv Stock Exchange.