Quebec's securities regulator, the Autorité des Marchés Financiers (AMF), have filed five insider trading charges against David Baazov, CEO of Amaya Inc., the company that owns online poker sites PokerStars and Full Tilt.
The charges stem from an investigation launched following the acquisition of PokerStars and Full Tilt by Amaya in a mega $4.9 billion deal.
The five charges filed against Baazov 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," according to a statement from the AMF on Wednesday, citing the dates of December 2013 to June 2014.
The investigation began in late 2014. On Dec. 11, 2014, AMF officials and Royal Canadian Mounted Police appeared at Amaya's offices in Montreal in an effort to collect information regarding Amaya's acquisition of Rational Group, the parent company of PokerStars and Full Tilt. Ahead of the sale, the value of Amaya's stock increased by roughly double. The stock rose an additional 30 percent following the completion of the sale.
"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," Baazov said in a statement.
In a separate statement from Amaya, the company acknowledged the charges and said it believes the charges come "without merit" and that it "expects Mr. Baazov will be fully exonerated."
Amaya added that it would continue to cooperate with regulators, and the statement said the company does not think the filing of the charges will have an impact on standard operations. According to Amaya, no changes will be made at this time to the PokerStars or Full Tilt product offerings.
"David Baazov has the full support of the independent members of the board," said Dave Gadhia, Amaya's Lead Director and independent board member, and the former Executive Vice Chairman and CEO of Gateway Casinos & Entertainment Inc. "As noted previously, Amaya conducted an external internal review, supervised by its independent board members with the assistance of external legal counsel from Osler, Hoskin & Harcourt LLP in Canada and Greenberg Traurig LLP in the U.S., which thoroughly reviewed the relevant internal activities surrounding the Oldford Group acquisition. This review found no evidence of any violations of Canadian securities laws or regulations. The independent members of the board received and reviewed the information and concluded that no action should be taken. We have not been provided with any new information upon which the AMF’s allegations of infractions are based."
Earlier this year, Baazov announced a plan to make an all-cash offer to acquire full ownership of Amaya. Although not commenting further on the bid process, Baazov did say that he was "still committed to working with my investor group and the board to consummate a successful transaction, which I believe is in the best interests of shareholders."
Charges were also filed against Benjamin Ahdoot, Yoel Altman, Diocles Capital Inc., and Sababa Consulting Inc..
Additionally, the AMF said that it had executed search warrants and ceased the trading privileges of 13 other individuals tied to the investigation.