Hearings have begun in Quebec to discuss the insider trading case involving former Amaya CEO David Baazov and thirteen of his associates, which include family, friends, and business colleagues. According to CTV News Montreal, two days of hearings in front of a financial sector independent tribunal began on Monday. Baazov has been hit with a number of charges, including “influencing or attempting to influence the market price” of Amaya stock and “communicating privileged information.”
Quebec’s financial regulatory body, the Autorité des marchés financiers (AMF), has documented an entire scheme in which it alleges that Baazov and others traded insider financial information in exchange for kickbacks. LaPresse made the AMF’s allegations public, which said that the scheme was of a “high level of organization and sophistication.”
The scheme, according to the AMF documentation, dates back six years, before Amaya acquired PokerStars’ parent company for $4.9 billion in June 2014. LaPresse wrote of the allegations (translated from French), “Several agreements were reached between the respondents to provide for the payment of dividends to be paid to [participants], and they were negotiated before the offenses.”
Kickbacks took many forms, from cash to checks to, in one case, a Rolex watch valued at $13,000.
The AMF says the scheme was clearly well-thought out and structured. For instance, the baker’s dozen involved allegedly rewarded each other with 10 percent of the net profits gained from any transactions in which they benefited from their information trading. The AMF estimates that the confidantes profited about $1.5 million from their insider dealing.
In late March 2016, David Baazov took a voluntary leave of absence his roles as CEO and Chairman of the Board of Amaya after he was indicted on the insider trading charges. At the time, he was supposedly working on a deal to acquire Amaya himself and take it private, so that was used as a partial excuse for his stepping away (he needed to “focus” on the acquisition package).
At the time, he said, “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.”
In August, he resigned altogether, saying, “I am proud of my contributions in building Amaya into the successful company it is today, and continue to be supportive of its strategy and management.”
David Baazov continues to maintain his innocence despite the evidence mounting against him. ““I want to reiterate that David Baazov is innocent, that he did nothing wrong and that he is eager to present his defense in court,” one of Baazov’s representatives said.