US SEC charges Israeli lawyers with Ormat insider trading

The U.S. Securities and Exchange Commission charged Israeli attorneys Advs. Rinat Gazit and Moshe Strugano with insider trading before the January 24, 2018 public announcement that Israel’s geothermal energy companyOrmat Technologies Inc. (NYSE: ORA; TASE: ORA) had signed a definitive agreement to acquire US Geothermal Inc., a geothermal energy company based in Boise, Idaho.

The SEC filed a complaint in the Federal District Court of New York that Adv. Gazit, the former head of mergers and acquisitions at Ormat, who lives in Tel Aviv, told her close friend, Strugano, a lawyer and resident of Caesarea, about the “material and non-public information” she had obtained regarding the potential acquisition of US Geothermal by Ormat. The SEC alleges that, based on advice from Gazit, Strugano purchased more than 740,000 shares of US Geothermal from December 19, 2017 to January 18, 2018. In the months following the announcement of the merger, Strugano sold all these shares for a total profit of more than $1.2 million.

The SEC accuses Strugano and Gazit of violating the anti-fraud provisions of the Securities and Exchange Act of 1934, and it seeks a permanent injunction, civil penalties and reimbursement with prejudgment interest against Strugano, as well as a permanent injunction, civil penalties and an officer and director bar against Gazit.

The U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against Strugano today.

On January 24, 2018, Ormat acquired US. Geothermal for 109 million dollars. Following the acquisition, the Ormat share price rose sharply.

A spokesperson for Adv. Moshe Strugano said: “We regret the charge filed without any evidence by the plaintiff, and we are therefore certain that the charges will be dismissed accordingly. The whole procedure has been invalid from the beginning, and the attempt to put pressure on Adv . Moshe Strogano ‘turning informant’ is not proper.”

A spokesperson for Adv. Rinat Gazit said: “In the civil proceedings against her, allegations have been raised that lawyer Gazit was not careful enough in the rules regarding the disclosure of information not available to the public concerning the agreement. acquisition that she managed as part of her position as head of M&A at Ormat. It is important to stress that there is no accusation that lawyer Gazit acted deliberately and it is certainly not asserted that she received benefits of any kind Above all, it will be specified that no kind of criminal charges Contrary to the allegations of the administrative procedure, lawyer Gazit acted in accordance with the law and with all regulations and she is confident that this will also be demonstrated at the end of the examination procedure.”

Published by Globes, Israel business news – en.globes.co.il – on April 24, 2022.

© Copyright Globes Publisher Itonut (1983) Ltd., 2022.


Garland K. Long