It should be noted that the remedy of cancellation and restitution is also prescribed in section 35(a) of the Securities Law. This section grants a person who purchased securities from the bidder in accordance with the prospectus, and did so based on a misleading detail in it, the right to cancel the purchase and demand the return of the monies he paid, provided that he did so on the dates set out in the section. This is an exceptional remedy in securities law, for which restrictive restrictions have been set, inter alia, that the right of cancellation is granted only to a person who purchased shares in accordance with the prospectus (Yamin Wasserman, p. 352), and only to the issuer (Reichert (Calculation of Damage), paragraph 83). In my opinion, the existence of an explicit clause in the law that establishes a remedy of restitution under clear and restrictive conditions strengthens the conclusion that such a remedy can and will be granted only in exceptional and exceptional circumstances.
- In the Rice case, the court also noted that in view of the tortious nature of a claim for a misleading detail, even where it is proven that if the misleading detail had been disclosed, the company's shares would have been worth zero, the plaintiff would have been entitled to compensation equal to his entire investment. This is because in this state of affairs, the difference between the cost he paid and the value of the paper at the time of the investment is the full amount of the investment (The Rice Matter, paragraph 101).
- And this brings us to our matter.
The plaintiff did not claim, and certainly did not prove, a contractual relationship or special relationship between him and the defendants.
The plaintiff also did not substantiate his claim that in the circumstances of the case he would not have purchased oil shares had it not been for the misleading individual. The plaintiff purchased shares of the company that was engaged in the exploration of gas and oil, and hence he sought to take upon himself the chance and risk inherent in such an investment. In fact, the plaintiff also holds the position that his entitlement to restitution stems from the dramatic significance of the data obtained after the electrical log tests. However, as noted, these meanings have not been proven. The addition of the data on the pore rate would have brought the public to the attention of the public that the decision to continue with production tests was made even given less than expected data regarding the pore rate. But it has not been proven that adding this figure would have dramatically changed the risk profile of investing in Shemen's shares. All the more so when I determined that the plaintiff did not prove that the data obtained in the electrical log tests showed "serious problems" in the drilling, or that the headline regarding the discovery of significant oil marks was false, or that the decision to proceed with production tests was unreasonable. More than necessary, it should be noted that it has also not been proven that an update regarding the pore data would have neutralized the positive information about the performance of the production tests. In these circumstances, the causal connection between the loss of the plaintiff's investment and the misleading detail in Sheman's reports has not been proven.