The plaintiff did not prove malicious or fraudulent conduct on the part of the defendants. Indeed, the plaintiff raised harsh and serious allegations against the defendants alleging acts of conspiracy, personal gain, and acting out of narrow personal interest, but these were not proven.
Hence, the misleading detail in our case is the non-inclusion of the updated pores figure in the report of September 8, 2013, and now it is necessary to examine whether the plaintiff has proven that he suffered damage that there is a causal connection between him and the publication of the misleading detail.
F.8 Whether the components of the damage and the causal connection between the deceptive individual and the damage have been proven
- In order for liability to arise for a misleading detail, the plaintiff must prove the existence of a misleading detail, damage, and a causal connection between the misleading detail and the damage (The Rice Matter, paragraph 99; A flash of interest, paragraph 93; Yamin Wasserman, p. 334; Paserman-Yosefov, p. 504).
- A claim for securities deception is, first and foremost, a claim of a tortious nature, and therefore the appropriate compensation for it is such that its purpose is to place the injured party in the place where he would have been had it not been for the deception (Civil Appeal 345/03 Reichert v. Heirs of the late Moshe Shemesh z"l, paragraphs 80-82 [Nevo] (June 7, 2007) (hereinafter: The Reichert case (calculation of damages))).
Proving damage related to a causal connection to a misleading detail is a complex issue, and as of now, "the Supreme Court has not yet had the final say on the method of calculating the damage in the case of a misleading detail in a prospectus or report" (Civil Appeal Authority 979/13 Landmark Group in Tax Appeal v. Harel Pia Mutual Funds Ltd., para. 12 [Nevo] (June 25, 2015) (hereinafter: the Landmark case); Civil Appeal 1582/20 in the Halfon case, para. 75). In the Reichert case (calculation of damage), the court discussed possible methods of calculating it and held that "... In view of the tortious nature of the claim for a misleading detail in the prospectus under the law, it appears that the proper method for calculating the damage in this claim is the out-of-pocket method" (ibid., para. 82). According to this method, the compensation is in the amount of the difference between the purchase price of the security and its real value at that time, had it not been for the misleading information. The court noted that the calculation of the damage according to this method is "not simple", mainly because it requires the determination of the "value line", which is a hypothetical line that reflects the "true value" of the security, and its comparison with the "price line" of the security (paragraph 87) (see also: Class Action (Central District) 14144-05-09 Harel Pia Mutual Funds in Tax Appeal v. Landmark Group Ltd., paragraphs 156-158, [Nevo] (December 27, 2012) (hereinafter: the Harel Pia case), the application for leave to appeal was denied in the Landmark case); Class Action (Tel Aviv District) 62995-12-21 Elyashayev v. Levinsky-Ofer Ltd., para. 143 [Nevo] (December 14, 2023)).