Insights & News /  Financial Regulation

Following a bill promoted by the Israel Securities Authority, and passed by the Knesset, outlawing binary options trading by Israeli companies, Yukom Communications LTD and its controlling shareholder, Yossi Herzog, filed a petition to the High Court of Justice. Overseeing the filing of the petition were Barnea attorneys Zohar Lande, Eyal Nachshon, and Moran Bickel.

Dr. Zvi Gabbay, Head of our Capital Markets Department, has published an article in Financial Magnates. It discusses the Israel Securities Authority's approach to Initial Coin Offerings (ICO) and cryptocurrencies and how this approach compares to other jurisdictions.

Dr. Zvi Gabbay, head of our firm's Capital Markets Department, gave several media interviews (in Heb) following the Israel Securities Authority Chairman's remarks that companies whose values are based on bitcoin will not be included in the Tel Aviv Stock Exchange's (TASE) indices until a suitable regulatory framework is established. Zvi noted it is important to distinguish between the inclusion of companies engaged in trading and investing in virtual currencies on TASE's indices and the possibility that such companies will actually be traded on TASE.

The Administrative Enforcement Committee rejected an administrative claim filed by the Israel Securities Authority against portfolio manager Ran Amitai for using inside information on a deal with the biotechnology company Compugen. Ran Amitai and Cramim Capital Markets were represented by Dr. Zvi Gabbay and Adv. Sapir Malul.

The Israeli CEO of a binary options company has been arrested by federal investigators in the United States on suspicion of committing electronic fraud. Dr. Zvi Gabbay, partner and head of our firm's Capital Markets Department, is representing the company in this matter. In an interview with TheMarker on the subject, he noted this is a relatively early stage in the legal process and that an indictment has not yet been filed.

Dr. Zvi Gabbay, Head of Barnea's Capital Markets Department, will participate today in the EY Anti-Fraud Forum. Zvi will discuss how workers can take an active role in self-regulation and compliance.

Dr. Zvi Gabbay, Head of the Capital Markets Department, had an op-ed published in The Marker on the regulation of digital currencies. He asserts there will be no choice but to build a unique regulatory model that matches the characteristics of these new financial instruments.

The US Securities and Exchange Commission (SEC) recently filed a lawsuit in a US court against an Israeli citizen and an American citizen for the use of inside information to acquire shares and options at Mobileye. The lawsuit alleges, among other things, that Mobileye's founders supplied information about the huge deal being forged between it and Intel. Dr. Zvi Gabbay, head of the Capital Markets Department at our firm was interviewed by TheMarker on the subject. He explained the differences between the enforcement process in Israel and the US and the relationship between civil enforcement by the SEC and criminal enforcement by federal prosecution.

Adv. Daniel Israeli was interviewed by TheMarker after the Monetary Authority of Singapore (MAS) announced it would begin regulating the issuance of virtual currencies (ICO). Daniel noted that Singapore has developed into a destination of sorts for ICOs, and thus the MAS' decision will certainly change the rules of the game.

Dr. Zvi Gabbay, Head of the Capital Markets and Financial Regulation Department at Barnea was interviewed on a financial radio program at the Public Broadcasting Corporation following the investigation of the heads of Bezeq and explained how the Securities Authority is investigating. (starting at min' 12.06)

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.