Knesset creates district court for 'economic affairs'
Specialist rulings expected to yield needed consistency.
A law passed in the Knesset yesterday set up a special economic affairs court to hear corporate and securities cases. As a division of the Tel Aviv District Court, it will be staffed by three judges, who will be assigned specifically to the new judicial body.
The establishment of the court is based upon the 2006 recommendations of the Goshen Committee, which was convened to look at issues involving corporate governance in Israel. The committee's findings were backed by Supreme Court President Dorit Beinisch, Justice Minister Yaakov Neeman, former attorney general Menachem Mazuz and the head of the Courts Administration, Judge Moshe Gal.
Criminal indictments on securities violations must be heard by the new court, as well as most civil cases involving corporate and securities law, including class-action suits (other than insolvency proceedings ). It will also hear administrative appeals of decisions of the Israel Securities Authority, the Tel Aviv Stock Exchange and the companies registrar, as well as appeals concerning decisions of the disciplinary committee established under the Regulation of Investment Advice and Investment Portfolio Management Law.
The Israel Securities Authority backed establishment of the court to streamline enforcement of criminal law, according to sources there. The court is supposed to ensure consistency in rulings and reduce uncertainty in the economic sector. It is also expected to encourage enforcement of corporate and securities laws through class-action suits. As its judges will specialize in economic issues, it is expected to strengthen efforts to protect investors in the capital market.
MK David Rotem (Yisrael Beiteinu ), who is chairman of the Knesset's Constitution, Law and Justice Committee, said the judges in the new court "will be able to professionally address disputes involving weighty matters that require prior knowledge and special expertise."
Securities authority head Zohar Goshen called the new law an "important milestone in the enforcement field for the capital markets." He said the court's expertise will enable it to deal with problematic transactions between a company and its controlling shareholder, transactions with the potential to harm the interests of public shareholders. Goshen said the law is expected to be a significant tool in dealing with the concentration of economic power. He praised the cooperation of a range of players that resulted in establishing the court.