Quebec securities regulator Autorite des marches financiers (AMF) has indicted David Baazov Chief Executive Officer of Amaya Inc. on multiple charges of insider trading. The Canadian regulator has accused him, along with others to have used confidential information regarding Amaya to trade and profit from share prices in the period between December 2013 and June 2014.
Baazov was suspected of insider trading when it was found that the share prices of Amaya more than doubled before the acquisition was made public and climbed by a further 30 percent after the deal was announced. An investigation was launched by AMF thereafter to probe the charges and Amaya’s Montreal office was raided as a part of the probe which resulted in confiscation of a lot of material which was taken as evidence.
Based on the results of the investigation, Baazov was charged earlier this week on five counts including trading using confidential information, influencing or trying to influence Amaya’s share prices and disclosing privileged information. These charges can result in penalties and jail time if he is found guilty. The AMF has additionally charged Yoel Altma, Benjamin Ahdoot, Sababa Consulting Inc., Diocles Capital Inc. in the case.
Baazov has refuted the accusations saying he will be fight them and is confident of clearing his name and being proven innocent. Amaya Inc has also expressed its support for its CEO saying that the allegations are unfounded and that Baazov will be exonerated of them.
Amaya’s board has also come out in support and released a statement which said
We have not been provided with any new information upon which the AMF’s allegations of infractions are based. David Baazov has the full support of the independent members of the board.
The regulator has in addition issued search warrants and freeze and cease trades instructions on other individuals involved in the case. A total of 13 individuals are suspected to have profited to the extent of C$1.5 million ($1.1 million) from disclosing confidential information on Amaya’s potential merger deals between the years 2011 and 2016.
AMF has said that its investigations will continue and it may file additional charges. This insider trading investigation is the largest ever conducted in Canada and required the collaboration of the AMF, the Quebec police and the Royal Canadian Mounted Police. They have also collaborated with U.S regulators for the past year to probe the abnormal spike in Amaya’s shares before the takeover of PokerStars in 2014.