Claim: This fulfilled the restriction of the Israel Investors Authority of Israel who claim to have lost…
Claim: This is how the Real Estate Authority's limit was fulfilled
Investors in Israel who claim to have lost 92% of investment money accuse the fund of marketing 70 investment units in the US, dividing investors into two groups, as no more than 35 investors can be recruited for one project.
Securities Bypass Mechanism
The lawsuit, prepared by Attorney Ziv Izner, states that "in an unsuccessful attempt to evade the prohibition on raising more than 35 investors in Israel without any prospectus, the group of investors who raised fulfillment was divided into two groups: Platinum Investors, of which 24 are plaintiffs. , And a group of gold investors, of which the 17 additional plaintiffs are listed. Publicity and the division of investors into two groups was done by the defendants in violation of the Securities Law. The real economic purpose of the fulfillment was to raise a specified amount of money for investment needs. In fact, 70 investment units were allocated to the public, which is exactly double the amount allowed by law for those who wish to avoid advertising. prospectus.
?? Avi Katz, co-owner of the Fulfillment Fund: Amit Shaal
"Through the fund's massive, superficial and populist fundraising mechanism, the fund, in front of thousands of recipients of its publications, made clear its sales fulfillment system to its clients, including the plaintiffs, whoever does not commit and declare its investment in the project within hours of the referral will miss the opportunity to call 'attractive'. 2019, having already been forced and realized by the Securities and Exchange Commission that it is committed to publishing a prospectus in every appeal to more than 35 investors in a real estate project proposal, and certainly when raising funds from a public of more than 35 investors, without the populist mechanism of borrowing Of the investment funds without a prospectus, the fund has difficulty raising similar investments when Hi A operates under full and detailed disclosure as required by a prospectus.
"The investment in the acquisition and renovation of the property was valued by a $ 17 million fulfillment fund. It is estimated that $ 6.13 million was funded by the 75 MOSAIC Foundation, which is an off-bank financing company and, in the vernacular, a gray market company." This, while the plaintiffs claim, had been promised a bank financing project. "At the marketing stage, investors have not been told that there is a devastating financial impact on the project delay, and that its management is exposed to a 19.5% predatory interest on the 75 MOSAIC fund and a $ 300 project charge per month delay until the plaintiffs' investment fund is destroyed." All of this, according to the plaintiffs, was due to the failure of the project as a result of negligence of fulfillment, and to conceal the failure results from the investors.
Prosecutors further allege that they have been misled by fulfillment and its managers believe that they "are making a solid investment in real estate, which is going to bring a return without any risk to their investment fund money." And that "for the right to participate in the 'safe' investment in the project, as soon as the plaintiffs joined the investment, the plaintiffs from the plaintiffs charged a high commission of 7% of the investment money, and the same amount funded from the same funds also collected from their investment with the developer, in a way that the plaintiffs earned from each project" . The lawsuit also states that in a television interview, Avi Katz said that "money is completely gone only when it comes to fraud. When you invest in a system like we built - you invest in such a strong club."
This is just one of the fulfillment fund projects that has been experiencing difficulties and causing losses to investors in recent years, when last October, Israeli investors in the HAPPY CANYON project in Denver, Colorado, were left without the money and the asset due to contracting with a dubious partner. This, after reaching fulfillment to investors in Israel in 2017, offered them to join the project in conjunction with local entrepreneur Gary Dragol, for its renovation, rental and sale.
The fund complimented the entrepreneur in the presentation, noting that it is her seventh partnership with him. However, a statement they received after their investment stated that at the end of August 2018, "as part of criminal and civil proceedings being initiated against developer Gary Dragol, a special manager was appointed for his assets," including the property in which he invested in Colorado.
About two weeks ago, the fund announced the appointment of Uzi Danino, the former CEO of Excellence, to the position of the fund's chairman, and Ronen Torem, the former CEO of Migdal Capital Markets, to the fund's CEO. The announcement came two months after the Calcalist revealed that the Israel Securities Authority delayed on September 10 this year for questioning Hanan Shemesh and CEO Ran Berkowitz, on suspicion of committing reporting offenses in connection with a contract with Dragol. As far as is known, public fulfillment has been made without a prospectus, and since 2017 it has been required to publish a prospectus for its recruitment from the public, in accordance with the demand received from the Securities and Exchange Commission on the matter.
"Risk level clarified"
The response said: "The plaintiffs' claims are recycled claims. This investment ended a year ago and investors were updated in real time. In the case in question, this is a segment of premium luxury properties, which has suffered a dramatic downturn in recent years. The level of risk in this project, as well as made explicit to investors in the investment presentation, is made clear. Investors present their investors with different risk profiles, and each investor chooses the level of risk against his or her own risk. The interest rate, as presented to investors, was about 12%.
"In the end, the funding body did not receive the interest on the loan it gave to the project, and did not repay the entire loan fund. Nevertheless, as a result of the efforts made by its real estate and attorneys for many months, fulfillment was able to repay the project's investors 8% of the fund. Particularly from the market situation, investors fulfilled a mechanism that is unparalleled in Israel, with which some of the non-plaintiff investors succeeded in recovering the lost equity. "
The response also states that fulfillment has been working for 241 years on XNUMX projects that it has managed and managed worldwide with great transparency and responsibility and will continue to do so in the future. According to fulfillment, over the past two weeks, its investors have received updates on successful exits, including the Dallas Desoto project in Texas and the completion of the Conroe project in Texas.
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