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06 November 2018
On 16 October 2018 the Supreme Court (the Honourable Justices Solberg, Groskopf and Baron) issued a decision in Civil Appeal 2889/18 – Cohen v Tower Semiconductor Ltd – confirming that the liability for breaches of reporting obligations in the secondary market by dual-listed companies is governed by the securities laws of the foreign trading jurisdiction.
The appeal was filed with respect to the Tel-Aviv District Court (Economic Division) ruling in favour of Tower Semiconductor Ltd. In his ruling, Honourable Judge Kabub provided an answer to the fundamental question: what law governs a dual-listed company with respect to liability for breaches of the company's ongoing reporting obligations in the secondary market? Following a comprehensive and extensive analysis, Kabub held that the securities laws of the foreign jurisdiction in which the company's shares are traded govern this issue. Further, Kabub held that the governing law with respect to liability of the dual-listed company's external auditors is also the law of the foreign jurisdiction in which the company's shares are traded.
The key points of the decision include the following:
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