A group of investors filed a class action against a public company and its officers for damage incurred due to breach of regulatory disclosure obligations when the company decided to deviate from its published investment policy without due report to the Israeli Securities Authority.
The Court accepted the motion in part and held that public companies and their decision-making officers owe a wide disclosure obligations on any event that may have a material impact on the corporation's business and its risk exposure. Extraordinary events that are outside the company's usual course of business or ordinary risk must be immediately reported due to the significant and immediate implications that such events may have on the price of the securities of the corporation. Change of corporate investment policy is an event that requires immediate reporting.