It was claimed that the fact that he purchased Shemen's shares based on its publications also arises from the affidavit of his wife, who read the publications herself and even brought them to him before he purchased the shares. Hence, the defendants' argument that the plaintiff did not read the company's immediate reports should be rejected, since it is sufficient that he read publications in the newspapers that published the immediate reports. In any event, it was argued that Shemen's report on September 8, 2013 speaks for itself and conceals material information that caused the plaintiff serious damage. Even given that investing in oil is a high-risk investment, as the defendants claim, it is not a gamble, and in any case, investors expect to receive a report when problems arise.
- It was claimed that the defendants knew of the serious problem in the drilling prior to the publication of the report dated September 8, 2013, and refrained from reporting it. It was claimed that in the electrical logs tests, it turned out that the porosity rate was 2%-6%, which is a lower figure and substantially different from what had been expected. It was argued that the defendants' knowledge of the serious problems in the drilling stemmed from the evidence, inter alia, from the minutes of the board meetings of September 7, 2013 and September 16, 2013, and from the testimony of Levy, who confirmed in his interrogation that the pores found in the tests were between 2%-6%.
It was further argued that the defendants' argument that the rate of pores discovered in the logs tests was not material information that required immediate publication of a report should be rejected. Levy confirmed that in the resources report (which was attached to the oil prospectus dated November 29, 2011, hereinafter: the first resources report) it was published that the forecast for pores is between 4% and 10%. It was claimed that the "Yam 3" drilling is a continuation of the "Yam 2" drilling with greater technological development and depth, and the defendants also compared the two drillings. The high expectations from Yam 3 stemmed from this comparison, and therefore the comparison between the drillings is relevant. According to the plaintiff, Levy confirmed that the "Yam 2" drilling had better porosity in the area of 12%-13%, although he claimed that he "did not see these 12%". Therefore, the latest data should be seen as a decrease in porosity from 12% in "Sea 2" to 2%-6% in Sea 3. This is a steep decline that should have been brought to the attention of investors.