Former Amaya Gaming Chief Executive Officer David Baazov has been aggressively fighting the charges of insider trading brought against him by the Canadian government earlier this year. In details released by the Toronto Globe and Mail earlier this month, further information regarding that case is coming to light.
Per Globe and Mail reporter Nicolas Van Praet, the attorneys for Baazov are accusing Canadian prosecutors of several missteps. First, Baazov attorney Sophie Melchers has stated that there have been massive dumps of information which are requiring extensive research by her staff. In addition to this, Melchers says the information being provided is insufficient to provide an adequate defense. Melchers points out an accusation from the prosecution that she is looking to have adjudicated for further clarity.
In their briefs, the Autorite des Marches Financiers (AMF), the government oversight agency from the Canadian government, alleges that Baazov used “fronts” to disguise trades that he made (more on this in a bit). Melchers counters that, since the AMF and government prosecutors don’t name these “fronts,” that she cannot properly prepare to defend them. “He’s being accused of trading via a front that’s not identified, with sums owned by an entity that’s not identified, on dates that are not identified,” Ms. Melchers is reported to have said of Mr. Baazov by Van Praet. “All those ingredients, we don’t know them.”
In attempting to clarify the information at hand, Melchers is requesting that the judge in the case direct the prosecution to disclose this mysterious information. In the courts of Canada, it is known as a “prete-nom,” or an actual naming of the situations where Baazov used some sort of alias to shield his identity from knowledge. It would also force the prosecution to not only clarify the names but also the time periods and other deeper details in the case.
Without this information, Melchers says it is impossible to be able to defend Baazov. “Today, nine months after charges were laid, it’s clear that the AMF’s evidence is incomplete,” Van Praet quotes Melchers as informing the court. “We don’t know the scope of what we should still expect.”
Baazov rocked the online poker world when he was able to negotiate the sale of PokerStars, then a privately-owned equity by the Scheinberg Family, to the publicly traded Amaya Gaming. The $4.9 billion deal by far was the largest in online gaming history and created one of the largest online gaming corporations in the industry when it took place in 2014. After some investigation, however, Canadian authorities weren’t sure of the legitimacy of some of the other actions surrounding the deal.
As usual after such a massive deal, the AMF began an investigation in 2014 and, in March of this year, decided they had enough evidence to proceed. Baazov and two associates, Benjamin Ahdoot and Yoel Altman, were all charged with different violations of insider trading laws. Baazov was charged with aiding in trades while in possession of privileged information, influencing or attempting to influence the market price of a stock (in this case, Amaya Gaming) and communicating privileged information. Ahdoot, Altman and three other companies – Dioclese Capital Inc., Sababa Consulting Inc. and 2374879 Ontario Inc. – are charged with aiding in trades while in possession of privileged information and influencing or attempting to influence the market price of a stock.
There is base evidence through the rocketing stock price that occurred around the sale point of PokerStars to Amaya Gaming. Prior to the sale, Amaya Gaming stock was trading around $7.50 per share on the NASDAQ boards but, as the information emerged that the deal was imminent, the share price soared over $35, nearly a five-time increase (currently Amaya Gaming stock is trading at $14.15 per share, still an 88% increase over its 2014 price). The AMF is alleging that Baazov and his cohorts, through their knowledge of the sale, bought Amaya stock at the low point and were the beneficiaries when the price hit its peak, the clearest definition of insider trading if there is one.
The trial in penal court in Toronto is continuing now, but it appears there is still quite a bit of posturing that the attorneys are taking. Poker News Daily will continue to monitor the situation.
