Court Upholds Exemptions For Foreign Private Issuers

Law360, New York (June 2, 2006, 12:00 AM EDT) -- In a precedent-setting decision, the U.S. Court of Appeals for the Second Circuit has upheld the right of the U.S. Securities and Exchange Commission to exempt foreign issuers listed on U.S. exchanges from certain reporting requirements.

The appeals court ruled in favor of Israel-based Tower Semiconducter Ltd., a foreign private issuer that had been exempted from section 14(a) of the Securities Exchange Act of 1934, which prohibits companies from issuing misleading proxy statements.

Shareholders alleged that Tower violated section 14(a) by issuing a misleading proxy statement...
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