Amaya shares down as CEO faces insider trading charges
Amaya Gaming has suffered a heavy drop in its share price after it was revealed that chief executive David Baazov will face five charges of insider trading in regards to the company’s acquisition of PokerStars.
A total of 23 charges have been filed by Quebec’s security regulator, the Autorité des marchés financiers (AMF), accusing Baazov of “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”.
Shortly after Amaya acquired PokerStars in 2014, a deal representing the largest of its kind in Canada, an investigation was launched into insider trading.
In a statement, Baazov strongly denied the charges, which could lead to fines or a prison term should he be found guilty.
“These allegations are false and I intend to vigorously contest these accusations,” Baazov said.
“While I am deeply disappointed with the AMF’s decision, I am highly confident I will be found innocent of all charges.”
Benjamin Ahdoot, a childhood friend of Baazov, and Yoel Altman, a lender and adviser to Amaya, are also facing charges “for trading while in possession of privileged information and influencing or attempting to influence the market price of the securities of Amaya”.
In addition, Diocles Capital inc, Sababa Consulting inc. and 2374879 Ontario inc. are charged with similar offences.
The news has had a significant impact on Amaya’s share price, which was down 17% during early trading on the Toronto Stock Exchange on Wednesday.
In response, Amaya has issued a statement in which it said that it believes the charges are “without merit” and expects Baazov to be fully exonerated.
The company also said that it does not anticipate that the charges will have any impact on the management or day-to-day affairs of the operating business, with no changes to the PokerStars or Full Tilt product offerings
Amaya added that it will continue to communicate with regulators and does not currently anticipate “any material negative impact on its current or potential licences, approvals or partnerships” as a result of the allegations against Baazov.
Dave Gadhia, lead director and independent board member at Amaya, said: “David Baazov has the full support of the independent members of the board.
“As noted previously, Amaya conducted an extensive 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.”