Almost all of the immediate reporting was devoted to detailing the conditions and did not include data regarding the quality of the borrower, his financial strength or his current income.
- I am of the opinion that in the circumstances of the concrete case, the detailed report of the conditions required of the borrower taught the investors that the company had prepared in advance that during the loan period it would be required to deal with non-fulfillment of one of the terms of the agreement on his part. Given that the company was prepared as aforesaid, and that the loan agreement included conditions to guarantee The repayment of the loan, inter alia, through the collateral and the agreed compensation, are part of the totality of the data that the investors would have. Understanding this state of affairs from reading the immediate report of April 29, 2018 does not require any special expertise or sophistication on the part of the investors. This is not an understanding that is found only among the company's officers or those with in-depth knowledge in the field of credit, but rather one that is within the realm of understanding of the reasonable investor, who is not an investor who lacks understanding.
- It should be emphasized that this does not indicate a general assumption relating to one type or another of loans or corporations, but rather to data that arise from the concrete circumstances of the loan in our case. For the purpose of this determination, it is also not required to classify the company as a corporation that provides foreign credit. After all, even according to the Authority's approach, the company reported to the public that it would operate in the field of providing credit backed by collateral (see also paragraphs 3.1 and 4 of the Administrative Statement of Claims, and a report dated February 19, 2018, Appendix 14 to Lorenzi's response).
I am of the opinion that the Enforcement Committee did not classify the company as a non-bank credit corporation nor did it present a concept according to which a failure to repay credit is always part of the normal course of business in these companies. In any event, I accept the Authority's position that even in this context there is no room for setting sweeping rules or assumptions. Without further ado, I will note that it is reasonable to assume that in this matter there will be differences between different corporations, the terms of the loans, the type of violations, their scope, etc. As stated, in our case, a determination is not required in relation to non-bank credit corporations as a rule.
- The three panelists also referred to the collateral given for the loan. Kastiel and Dekel-Shafrir ruled that in our case, the collateral given to secure the loan significantly reduced the risk that the company would have been exposed as a result of the breach. The chairman of the panel was of the opinion that the collateral fit into the set of reasons for rejecting the Authority's position.
The ISA argues that there was no reason to require the existence of collateral at all, nor to analyze their significance in relation to the risk that exists to the company due to the breach. This is because the realization of collateral may be complex and involve considerable and sometimes certain costs that seem to be false. In retrospect, it turns out that time and resources were required to repay the loan.