Morrison Cohen Attains Settlement for Founders of Israeli Communications Firm in Case Brought by SEC

On March 30, 2023, the U.S. District Court for the Southern District of New York finalized a settlement agreement in a case brought by the SEC against Morrison Cohen clients, Anatoly Hurgin and Alexander Aurovsky, co-founders of Ability Computer & Software Industries Ltd. The SEC’s 2019 complaint accused Hurgin and Aurovsky of securities laws violations in the lead-up to its 2015 merger with Cambridge Capital Acquisition Corp.

While the SEC sought over $25 million in its suit, U.S. District Judge Mary Kay Vyskocil entered a Final Order requiring, among other things, Messrs. Hurgin and Aurovsky to pay an amount of disgorgement to the SEC, which obligation was fully satisfied by a release of $6.5 million from an Ability account.

The settlement follows Judge Vyskocil’s summary judgment ruling last fall, in which the Court stated, “Based on the Court’s searching examination of the record, the SEC’s evidence falls well short of its arguments. Indeed, a jury might conclude the SEC’s evidence is so underwhelming—especially in contrast to its pitched accusations—that the jury finds that neither Hurgin nor Aurovsky is liable for any of the violations alleged in the complaint.”

Under the settlement's terms, the executives did not admit or deny the allegations of the complaint. The agreement avoids a jury trial that had been scheduled to begin April 18.

Partners Edward P. Gilbert, Jason Gottlieb and Daniel Isaacs represented Hurgin and Aurovsky.

The case was covered in Law360 on March 31, 2023. Subscribers, read the article here.