US SEC charges Israeli lawyers over Ormat insider trading

SEC Credit; Andrew Harnik Shutterstock
SEC Credit; Andrew Harnik Shutterstock

The SEC claims that Adv. Moshe Strugano bought and sold Ormat shares for a profit of $1.2 million following a tip from Ormat head of M&A Adv. Rinat Gazit.

The US Securities and Exchange Commission has charged Israeli lawyers Advs. Rinat Gazit and Moshe Strugano with insider trading ahead of the January 24, 2018 public announcement that Israeli geothermal energy companyOrmat Technologies Inc. (NYSE: ORA; TASE: ORA) had signed a definitive agreement to acquire U.S. Geothermal Inc., a geothermal energy company based in Boise, Idaho.

The SEC filed a complaint in the federal district court in New York that Adv. Gazit, the former head of mergers and acquisitions at Ormat, who lives in Tel Aviv, tipped her close friend, Strugano, an attorney and resident of Caesarea, with "material, nonpublic information" she had obtained concerning Ormat's potential acquisition of U.S. Geothermal. The SEC alleges that based on Gazit's tip, Strugano purchased more than 740,000 shares of U.S. Geothermal stock from December 19, 2017 through January 18, 2018. In the months following the merger announcement, Strugano sold all of these shares for a total profit of over $1.2 million.

The SEC charges Strugano and Gazit with violating antifraud provisions of the Securities and Exchange Act of 1934, and it seeks a permanent injunction, civil penalties, and disgorgement with prejudgment interest against Strugano, and a permanent injunction, civil penalties, and an officer and director bar against Gazit.

The US Attorney's Office for the Southern District of New York today also announced criminal charges against Strugano.

On January 24, 2018, Ormat acquired US. Geothermal for $109 million. Following the acquisition, Ormat's share price rose sharply.

A spokesperson for Adv. Moshe Strugano said, "We regret the charge filed without any proof by the plaintiff, and we are therefore certain that the charges will be thrown out accordingly. The entire procedure has been invalid from the start, and the attempt to put pressure on Adv. Moshe Strogano 'to turn informant' has been unfitting."

A spokesperson for Adv. Rinat Gazit said, "In the civil procedure filed against her, allegations have been raised that Adv. Gazit was not careful enough in the rules regarding revealing information not available to the public regarding the acquisition deal that she handled as part of her position as head of M&A at Ormat. It is important to point out that there is no charge that Adv. Gazit acted deliberately and it is certainly not claimed that she received any sort of benefits. Above all, it will be made clear that no kind of criminal charges are being brought against Adv. Gazit. In contradiction to the allegations in the administrative procedure, Adv. Gazit acted according to the law and according to all the regulations and she is convinced that this will also be shown by the end of the examination proceedings."

Published by Globes, Israel business news - - on April 24, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

SEC Credit; Andrew Harnik Shutterstock
SEC Credit; Andrew Harnik Shutterstock
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