Insider trading charges have been filed against David Baazov, the CEO of Amaya Gaming following an investigation around the company’s acquisition of PokerStars. The charges were filed by Quebec’s securities regulator, l’Autorité des marchés financiers (AMF).
Mr. Baazov faces five charges for “aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya, and communicating privileged information,” according to a statement from the AMF on Wednesday, citing the dates of December 2013 to June 2014. If proven, the charges could carry fines of up to $5 million and five years in prison, according to the AMF.
Recently, Baazov has announced a plan to buy his publicly traded company from shareholders and take it private. These plans have been thrown into question due to the ongoing investigation which initially began in June 2014 and made news when Amaya Gaming’s Pointe-Claire, Quebec offices were raided by the RCMP and AMF officials in December 2014 in efforts to gather information.
The $4.9 Billion deal to acquire PokerStars and Full Tilt parent Rational Group would make Amaya Gaming the largest online gaming company globally. The value of Amaya’s stock nearly tripled from the time immediately preceding the acquisition of PokerStars to after the transaction’s completion reaching as high as $39 compared to 52 week low of around $8 prior to the news.
Shares in Amaya which recently traded around $18 were halted on Wednesday and fell 20% when trading resumed.
A number of individuals and companies join Baazov in charges by the AMF including Benjamin Ahdoot, Yoel Altman, Diocles Capital Inc., Sababa Consulting Inc. and 2374879 Ontario Inc. A number of other individuals said to have also benefited were ordered to cease trading and have 30 days to respond. They include : Josh Baazov, Craig Levett, Nathalie Bensmihan, Karl Fallenbaum, Earl Levett, Feras Antoon, Mark Wael Antoon, Isam Mansour, Mona Kassfy, Allie Mansour, John Chatzidakis, Eleni Psicharis and Alain Anawati.
“We have made suppressing illegal insider trading and market manipulation a top priority, as this type of conduct profoundly affects public confidence and the integrity of our markets,” said AMF President and CEO Louis Morisset.
Baazov issued a statement in response to the charges where he stated:
“While I am deeply disappointed with the AMF’s decision, I am highly confident I will be found innocent of all these charges,” he said.
“I have always been proud of my reputation for personal integrity and ethical business conduct.”
Baazov continues to pursue plans to acquire the shares of the company in a $21 per share offer and take it private.