Calcalist, Tomer Ganon, 20.04.2021

The fundraising agreements from Fulfillment Fund deposits in real estate projects abroad were illegal contracts, because they were held without the publication of a prospectus under the Securities Law, Tel Aviv District Economic Court Judge Ruth Ronen ruled in a dramatic ruling today (Tuesday). Approved to conduct a class action against fulfillment in respect of 250 projects that have been marketed since its inception. The amount of the class action, which will next be examined by the court, was NIS 1.55 billion.

The class action lawsuit against the Fulfillment Fund was filed about a year ago by investors, represented by attorneys Hagai Levy, Eliram Beckel and Mor Lieberman of the Gazit-Beckel law firm. And Gil Unger.

According to the plaintiffs, the participation units for investment in overseas projects marketed by Fulfillment, which establishes limited partnerships for each venture separately, are defined as securities. In return on investment.Therefore it was mandatory for fulfillment to publish a prospectus.

Fulfillment claimed that its publications and offers to the public were protected under the exception to the Securities Law. This means that the separation between the investment tracks, so that there will be no more than 35 people in each track, allows it not to publish a prospectus.

Judge Ronen rejected the fulfillment claim, ruling that it was a securities proposal and therefore it was obligatory to publish a prospectus. "Publishing a prospectus is a gateway to securities law," Ronen wrote. The prospectus fulfills the purposes of the law: protecting the investing public, ensuring proper disclosure and an efficient and sophisticated market. "

According to the ruling, due to the fact that the funds for the fulfillment projects, amounting to hundreds of millions of shekels, were raised without a prospectus, "they are infected with a fundamental illegality and their illegal cutting."

In the ruling, Ronen also stated, contrary to the position of fulfillment, that investors could in principle demand a return on investment money. It rejected various legal claims of the fund on the subject, stating that "the role of fulfillment was not limited to brokering the transaction and raising funds for an external party - the various real estate projects. The designated partnerships were under the full control of the fund, and it was the one that worked to raise funds from the public and invest them for the purpose of financing its business activities. "

Fulfillment stated: "This is a long and complex decision when the application was approved in relation to only one cause of action (the claim that the lack of a prospectus made the engagement of fulfillment an illegal contract), and the other two grounds (deception and tort) were denied.

It is important for us to note that contrary to what is written, the application was approved only against the companies, and was rejected against the shareholders and officers. "