Judge J. Paul Oetken of the Southern District of New York recently granted Carter Ledyard’s motion to dismiss all securities fraud claims against the current CFO and former CEO and CFO of B Communications Ltd. (BCOM). BCOM, an Israeli company listed on both NASDAQ and the Tel Aviv Stock Exchange, holds an interest in Israel’s largest telecommunications provider, Bezeq The Israel Telecommunication Corp., Ltd. (Bezeq).
Following an investigation by the Israel Securities Authority, a group of BCOM investors alleged in a complaint seeking class action approval that BCOM, its individual officers, and others failed to disclose certain information that was required to be disclosed in BCOM’s Securities and Exchange Commission (SEC) filings. The plaintiffs claimed that certain individuals (who are not Carter Ledyard’s clients) leaked confidential information from an independent subcommittee of BCOM’s subsidiary, Bezeq, that was considering the acquisition of an Israeli satellite television company, DBS Satellite Services (1998) Ltd. (a/k/a Yes) (DBS), in 2015. The plaintiffs also alleged that following the acquisition, certain individuals manipulated DBS’s financial results to cause Bezeq to overpay for the transaction and enrich the seller. As a result, the plaintiffs claimed, BCOM’s SEC filings that incorporated the financial results of its subsidiaries allegedly were misleading.
In a March 28, 2019 opinion, Judge Oetken dismissed all claims against BCOM’s current and former officers, finding that the complaint did not contain specific factual allegations that BCOM’s officers knew of or participated in the alleged leaks or manipulation of financial results. The opinion also granted separate motions to dismiss by BCOM’s Israeli subsidiaries and officers of those companies on the grounds that the court lacked jurisdiction over those defendants.
In an earlier September 27, 2018 opinion, Judge Oetken granted in part Carter Ledyard’s motion to dismiss the claims against BCOM. That opinion found that the Plaintiffs failed to allege violations of federal securities laws by BCOM concerning BCOM’s statements about its code of ethics and disclosure and reporting controls, and dismissed most claims concerning BCOM’s statements about the Bezeq subcommittee.
BCOM and its current and former officers are represented by Carter Ledyard attorneys Jeffrey S. Boxer, Steven J. Glusband, Guy Ben-Ami, Jacob H. Nemon, and Dylan L. Ruffi.