David Baazov charged over actions prior to Amaya’s PokerStars purchase

a CEO David Baazov is facing five charges related to insider trading in the lead-up to the company’s acquisition of the owner of PokerStars and Full Tilt in 2014, Quebec financial security regulator the Autorité des marchés financiers (AMF) has confirmed.

The AMF has filed penal proceedings against Baazov, and other parties that have also been charged are:

• Benjamin Ahdoot, reportedly a childhood friend of Baazov’s

• Yoel Altman, reportedly a lendor and advisor to Amaya

• Diocles Capital inc. – Which does not seem to have a website but would appear to be an investment company

• Sababa Consulting inc. – Which also does not seem to have a website, but florida.intercreditreport.com explains that the company is active

• Ontario inc. – a biopharmaceutical company

A total of 23 charges have been filed by the AMF.

The five charges faced by Baazov in particular are for “aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya inc., and communicating privileged information”.

Amaya officially acquired Oldford Group, owner of Rational Group, which operates the PokerStars and Full Tilt brands, for $4.9bn in August 2014 and the agreement of the deal was announced in June earlier that year.

An investigation into the deal began before the end of 2014, as Amaya’s headquarters in Montreal were visited by the AMF in December of that year.

The AMF was also given search warrants to investigate Canaccord Genuity, an investment bank that was involved in the Oldford Group purchase, and insurance firm Manulife Financial, reportedly a 6% stakeholder in Amaya.

The AMF said: “Based on the AMF’s investigation, the respondents are alleged in particular to have used, between December 2013 and June 2014, privileged information pertaining to the securities of Amaya inc. for trading purposes. As well, a few of the respondents are alleged to have conspired to commit some of the offences.”

Amaya’s share price increased from CAD$7.95 on 2 December 2013 to CAD$12.02 on 11 June 2014, the day before the agreement for Amaya to buy Oldford Group was announced.

Baazov released a statement saying: “Yesterday I was served notice that I would be charged by the Autorité des marchés financiers alleging that I engaged in market manipulation of Amaya Inc. shares and that I unlawfully provided non-public information to third parties prior to Amaya's acquisition of the Rational Group Ltd. in 2014.

“These allegations are false and I intend to vigorously contest these accusations. While I am deeply disappointed with the AMF's decision, I am highly confident I will be found innocent of all charges.”

The news comes after PokerStars New Jersey launched on Monday.

Amaya said: “The charges related to communicating privileged information involve allegations relating to a former financial advisor to Amaya, and the charges relating to influencing or attempting to influence the market price of Amaya securities involve allegations relating to that same advisor and an employee. Mr. Baazov denies the allegations against him, and Amaya believes they are without merit and expects Mr. Baazov will be fully exonerated.

“Amaya does not anticipate the charges will have any impact on the management or day-to-day affairs of the operating business.”

The AMF said its investigations are ongoing and that other charges may be filed.