The former CEO of Amaya Inc., and its Golden Boy, David Baazov, is accused of wrongdoing and insider trading by the Quebec’s financial regulatory arm, the AMF. According to recent charges filed by AMF and multiple investigations that continued throughout the last six months, David Baazov was the head of a sophisticated insider network that profited from the insider information regarding mergers and other activities.
Interestingly, the investigation claims that the entire network consisted of 13 members, which included friends, family members and close business associates of David Baazov.
Accordingly, AMF also claims that the information was released by David Baazov to his brother Josh Baazov and their associate, Craig Levett. These members would tip others in the network to profit from the stock prices before the merger and investment activities.
It is interesting to note that David Baazov was instrumental in the success of Amaya Inc from a medium-scale company to one of the largest online gambling players in the world. Actually, he gained immense fame by masterminding the $4.9 Billion acquisition of the PokerStars by Amaya Inc. During multiple M&A and buyouts in the last six years, David and his associated asked for a 10 percent kickback from profits, AMF investigators claim.
After regular inquiries and consistent pressure from the investigation authorities, David Baazov initially took a leave, which was followed by his decision to step down as the CEO of Amaya Inc.
Prosecutors also explained that they have filed charges against six M&A deals going back six years since the deal of Cryptologic. As of now, the total damage from insider trading is nearly $1.5 Million. However, charges do not pertain to financial sum only because investigators are also pressing claims of wrongdoings. As suggested earlier, the method of wrongdoing was fairly sophisticated, which is making investigators work hard for additional evidence. Interestingly, investigators have also revealed that family members of David have tried to take the company public which may disrupt the current access granted to the investigators. However, AMF is aware that David Baazov is still the majority shareholder of Amaya Inc. and he has extensive powers to decide the fate of his company. Some experts believe that it is a race against time before investigators may face problems.
Interestingly, David Baazov has not responded to any press queries. Instead, he prefers to be represented by his lawyer. Ian Robinson, his lawyer, emailed the Financial Post that David is categorical in his defense. The email also explained that David will continue to deny these allegations because he is also eager to defend his case.