Amaya CEO Baazov Hit With Insider Trading ChargesMarch 24, 2016 2:18 pm
It has been a hell of a week for the world’s largest online gaming operator, Amaya Inc. On Monday, the Canadian company made a much-anticipated return to the US market, but the positive news for players in the US was marred for those around the globe after PokerStars also announced a rake charge increase scheduled for March 28th.
In a further worrying development for Amaya, the company’s CEO David Baazov has now been hit with insider trading charges and “attempting to influence the market price of the securities of Amaya” by the Quebec Autorité des Marchés Financiers (AMF). If found guilty, offenders are likely to face “stiff fines as well as prison terms”.
The investigation stems from the 2014 acquisition of PokerStars by Amaya for $4.9 billion, and specifically the heavy shares betting which took place a few months before the deal was announced. As a result, a total of 23 charges have so far been levelled against David Baazov, and his childhood friend Benjamin Ahdoot, as well as against former Amaya adviser/lender Yoel Altman. Three other companies also face charges from the AMF, including Diocles Capital inc,, Sababa Consulting inc., and 2374879 Ontario inc.
“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,” explained AMF President Louis Morisset.
Nevertheless, David Baazov said he would vehemently contest the AMF’s “false” allegations, and said that he still intends to pursue his plan of taking the company private. In the meantime, shares in Amaya plunged after the charges were announced, and at the end of Wednesday finished lower by 20.5% at CAD$14.75 per share. Over the past 52 weeks, Amaya shares have fluctuated from CAD$13.71 to 37.53, and over the past year the company has lost -53.46% of its value. As of today, Amaya shares are currently trading at 15.10, giving it a market capitalization of CAD$2.20 billion