Lorenzi's arguments for rejecting the petition on its merits
- In his response, Lorenzi detailed the factual basis while emphasizing key data for his approach, and attached documents to support his claims.
In his response, Lorenzi emphasized that from the respondents' point of view, the sequence of events in relation to the loan was expected and constituted a business opportunity to increase the company's profits from the engagement with the borrower. This is because, given the good collateral in which the loan was guaranteed, the repayment of the loan was not in danger. At no stage did the Company believe that the information about the breach was material information and that the conduct of the Board of Directors was consistent with this position.
- It was argued that the decision of the Enforcement Committee was presented in the petition incorrectly. The essence of the committee's determination was that in the circumstances of the case, the information about the borrower's breach of the loan agreement was not material. It was argued that the panel distinguished between the question of "the substance of the breach" and the question of "the substance of the loan" and determined that the breach was not an event that required the publication of an immediate report. The Authority, on the other hand, argued in the course of the proceeding and continues to argue in the petition regarding the "substance of the loan", even though this is not at all in dispute.
- It was further argued that the panel's determination that the borrower's arrears in payments did not or could not have had a material impact on the corporation is a factual determination. In an administrative petition, the court refrained from intervening in factual determinations, except in cases in which the panel clearly erred in applying the tests and criterion in a manner that significantly deviated from reasonableness.
- It was argued that even according to the Authority's approach, the borrower's breach was not material on the quantitative level. Under these circumstances, obligatory The Authority should base the argument that although the violation is not quantitatively material, it constitutes material information on the qualitative level, and therefore establishes a reporting obligation. In this obligation, the Authority has failed.
The Enforcement Committee did not explain the lack of substance to the violation by the fact that the company is a non-bank credit corporation. All that was stated in the panel's decision is that within the framework of all the considerations, the type of business in which the company is engaged and their nature must also be taken into account. This includes the data according to which the loan was given in a non-bank credit, in the framework of which it is possible to anticipate in advance the risk of default in payments and determine the terms of the loan accordingly. For the purpose of this determination, there is no need to address the question of classifying the company as a non-bank credit corporation.