כניסה

Fines, against Companies Breaching the Securities Law, Enacted by ISA for the First Time; Total sum about– 390,000 NIS
The ISA expects that once this enforcement tool becomes customary it will turn into a major deterrence factor. The fines collected by the ISA are transferred to the Treasury
 
The ISA has enacted a fine imposition system ("financial fine" in the language of the Law) vis-?-vis reporting companies, their principal shareholders and underwrites. This is the first time a fine is imposed, since the new Law came into effect, in October 2007, following the required period of preparation and notification of the market prior to enacting the abovementioned system. The ISA expects that once the aforesaid enforcement tool becomes customary it will turn into a major deterrence factor.    
 
The imposition of fines on a reporting company, its principal shareholders and its underwriter is intended to compel, all those, responsible for supplying updated information to the capital market to do so punctually and in accordance with the requirements of the Law. The aforesaid can be achieved by increasing the awareness of the abovementioned entities regarding their responsibility concerning the reporting requirements, both in terms of substance and punctually. 
 
The amended Law allows imposing sanctions for: a public offer made without a prospectus authorized for publication by the ISA, a sale to the public of that is not according to the prospectus authorized by the ISA, non-publication of an amended prospectus, late submission of immediate and financial reports and/or submission lacking complete information and/or not according to the provisions of the Law and its Regulations, non-presentation of data in financial statements, non-reporting regarding the trustee's end of tenure. As regards the issuers, the fine will be imposed for: non-compliance with the qualification requirements, breach of the conflicts of interest provisions and more.
 
According to the procedure, approved by the ISA, a committee, comprised of the members of the plenum, has been created in order to discuss and impose the fines. Following the staff's decision to bring up a particular violation of the Law for discussion in the Fines Committee, a notice is sent to the relevant entity, regarding the intent to impose a fine. The notice includes details pertaining to the violation, according to the information available to the ISA at the time, sections of the Law relevant for the violation and the fine imposed by the ISA for the aforesaid violation. By doing so, the company or the underwriter, accordingly, is given the opportunity to present its explanation, regarding the violation, in writing. The claims raised by the defendant are examined by the ISA and it acts in accordance with the findings. If the findings point out to the fact that there is no justification for the annulment or reduction of the fine, the company is obligated to pay within the stipulated period of time, as well as to publish an immediate report regarding the fine. However, the company has a right to appeal the decision of the Fines Committee at the district court.       
 
Lately, the ISA had imposed fines on several companies and on one principal shareholder, for the violation of the Securities law. The total sum of the fines is 390,000 NIS. All companies were able to submit their explanations to the ISA. All those, on whom the fines were imposed, were notified and required to publish an immediate report on the issue. The fines collected by the ISA are transferred to the Treasury.  
 
Henceforth is the list of companies, on which the fines have been imposed:

 

ISA decision to impose the fine

2.7.2008

Sections of the Law that were breached 

Description of the violation

(sum of the imposed fine)

Name of the corporation

(reporater/ underwriter/ principal shareholder)

Decided to impose a fine in the sum of  30,000 NIS;

15,000 for each violation

Section 36 of the Securities Law and Section 3(9) of the Transactions with Controlling Shareholders Regulations

The company published conflicts of interest report authorized by 2 external directors whose appointment wasn't valid at the time of aforesaid authorization.

The company published a list of office holders that included 2 external directors whose appointment wasn't valid  

Imposed fine: 30,000 NIS

15,000 for each violation

B. Barashi Road's infrastructure Ltd (1987)
Decided to impose a fine in the sum of 57,000 NIS, including additional fine for continuous violation

Section 37 of the Securities

Law and Sections 33(a), 30(a) of the Immediate and Periodic Reports Regulations

Principal shareholder's belated reporting to the company, regarding a change in her holdings in the company.

Imposed fine: 39,000 NIS – 3,00 for each violation

Continuous violation – 18,480 NIS

Total: 57,480   

Principal shareholder in "Pate Bophirima Ltd"
Decided to impose a fine in the sum of 15,000 NIS, without imposing a fine for continuous violation  Section 36 of the securities Law, and Section 39A of the Immediate and Periodic Reports Regulations

Non-submission of financial reports, containing significant information required by Law.

Imposed fine: 15,000 NIS

Continuous violation – 78,600 NIS

Total: 93,600   

Prizma ILN Ltd
Decided to impose a fine in the sum of 24,000NIS including additional fine for continuous violationSection  36 of the Securities Law, and Section 7 of the Immediate and Periodic Reports Regulations

Late in submitting periodic financial reports for 2007, by 16 days.

Imposed fine: 15,000 NIS

Continuous violation: 9,000 NIS

Total: 24,000 NIS

Denli A.M. Finance Ltd
Decided to impose a fine in the sum of 48,600 NIS including additional fine for continuous violation  Section  36 of the Securities Law, and Section 7 of the Immediate and Periodic Reports Regulations

Late in submitting periodic financial reports for 2007, by 15 days.

Imposed fine: 30,000 NIS

Continuous violation: 16,800 NIS

Total: 46,800 NIS

Company for Development of Developer's Center Ltd
Decided to impose a fine in the sum of 24,600 NIS including additional fine for continuous violation  Section  36 of the Securities Law, and Section 7 of the Immediate and Periodic Reports Regulations

Late in submitting periodic financial reports for 2007, by 52 days.

Imposed fine: 15,000 NIS

Continuous violation: 9,600 NIS

Total: 24,600 NIS

Lito Group Ltd
Decided to impose a fine in the sum of 24,600 NIS including additional fine for continuous violation  Section  36 of the Securities Law, and Section 7 of the Immediate and Periodic Reports Regulations

Late in submitting periodic financial reports for 2007, by 52 days.

Imposed fine: 15,000 NIS

Continuous violation: 9,600 NIS

Total: 24,600 NIS

Lito Group Ltd
Decided to impose a fine in the sum of 19,200 NIS including additional fine for continuous violation  Section  36 of the Securities Law, and Section 7 of the Immediate and Periodic Reports Regulations

Late in submitting periodic financial reports for 2007, by 8 days.

Imposed fine: 15,000 NIS

Continuous violation: 4,200 NIS

Total: 19,200 NIS

Dorot Holdings Ltd
Decided to impose a fine in the sum of 134,400 NIS including additional fine for continuous violation  Section  36 of the Securities Law, and Section 7 of the Immediate and Periodic Reports Regulations

Late in submitting periodic financial reports for 2007, by 4 days.

Imposed fine: 120,000 NIS

Continuous violation: 14,400 NIS

Total: 134,400 NIS

9. מטיס קפיטל בע"מ

 

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