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Amaya CEO Baazov Slammed with Insider Trading Charges
Just three days after officially launching PokerStars in New Jersey, Amaya CEO David Baazov finds himself at the center of 23 charges of insider trading as part of Quebec’s security regulator Autorité des marchés financiers (AMF) investigation into the company.
Amaya’s CEO David Baazov is personally facing 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 inc., and communicating privileged information,” according to a release by the AMF.
Amaya owns the Rational Gaming Group, under which the PokerStars and Full Tilt brands are aligned.
The company’s stocks immediately plunged 21% following news of the charges earlier today.
Baazov: “Allegations Are False”
David Baazov defended himself in a press release following news of the insider trading charges earlier today.
"These allegations are false and I intend to vigorously contest these accusations" he said.
"While I am deeply disappointed with the AMF's decision, I am highly confident I will be found innocent of all charges."
Baazov isn’t the only one being charged as his childhood friend Benjamin Ahdoot, an advisor for Amaya, is also facing charges from the AMF.
Offenders are liable to stiff fines and prison terms under the provisions of the Securities Act in Quebec, according to the AMF.
The investigation into the insider trading surrounding Amaya began nearly at the exact time the company pulled off the historic $4.9 billion purchase of PokerStars in 2014.
It’s unclear how these charges will affect Baazov’s proposed $2.8 billion bid to take PokerStars private, which was announced earlier this year.
Update: Amaya has since responded with the following press release stating business will continue as usual:
MONTREAL, March 23, 2016 – Amaya Inc. (NASDAQ: AYA; TSX: AYA) today provided an update regarding the previously reported investigation by the Autorité des marchés financiers (AMF), the securities regulatory authority in the Province of Quebec. The AMF has charged Amaya’s Chairman and Chief Executive Officer, David Baazov, for aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of Amaya securities and communicating privileged information but has made no allegation of wrongdoing by Amaya or any of its subsidiaries or other directors or officers.
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. Operations continue as usual and there will be no change to the PokerStars or Full Tilt product offerings, either in customer experience, player fund security or game integrity. Amaya will continue to communicate with its regulators and does not currently anticipate any material negative impact on its current or potential licenses, approvals or partnerships as a result of the allegations against Mr. Baazov.