Amaya’s CEO and Chair David Baazov has taken a leave of absence after being indicted of insider trading. Quebec’s securities regulator Autorité des marchés financiers (AMF) charged Baazov last week with five counts of insider trading, including disclosing confidential information over a period of five years.
The AMF has also accused 13 others including his brother Josh Baazov and a mutual friend Chris Levett of benefitting from illegal trading using privileged information of Amaya’s business deals that was leaked by David Baazov.
According to AMF, Baazov shared information with Josh who then passed it to Levett enabling him and his associates to make illegal trading profits to the extent of $1.5 million.
While Baazov will continue to be on the company’s board of directors, Rafi Ashkenaz will take over the role of CEO. Ashkenaz is the CEO of Rational Group, the subsidiary that operates the PokerStars and Full Tilt Poker websites. Dave Gadhia who was the CEO of Gateway Casinos from 1992 until 2010 will be stepping in as the interim chair.
Baazov has asserted that he is innocent of the charges and will fight to prove it. He has also maintained that he is still continuing with his plan to take the company private.
AMF’s documents provide details of the insider trading which occurred over a five year period in seven transactions involving different companies. Individual profits from the transactions varied, from $500 to $155,839. Around $800,000 is reported to have been the profit from illegal trading based on information of Amaya’s $4.9 billion takeover of the Oldford Group, who were the former owners of PokerStars and Full Tilt Poker.
AMF had tapped phone calls and other communication channels during its investigation.
According to the AMF investigation Craig Levett and his family netted profits of $500,000 based on insider information disclosed by Josh Baazov. The AMF has also filed charges against other friends and associates of Josh Baazov who made use of the information circulated by Josh to carry out illegal trades and profit from them.
The charges also included John Chatzidakis, an independent Sun Life Financial adviser who lost his license and was terminated after the investigation named him as one of the accused. Amaya’s shares have fallen sharply after the AMF charged David Baazov, dropping by 4.1 percent to $14.81 on the Toronto Stock Exchange early this week. The Intertain Group, which is one of companies that Josh Baazov is alleged to have leaked information for insider trading, has said that its shares have been impacted after being included in the AMF’s investigations.
