Amaya Founder David Baazov allegedly provided confidential information about his company’s future investment strategy to outside investors, and then took financial kickbacks for delivering the knowledge. That’s according to Quebec’s Autorité des Marchés Financiers (AMF), the province’s securities and financial regulatory arm.
In newly released documents, the AMF says it has reason to believe that ex-Amaya consultant Craig Levett profited from an insider trading scheme orchestrated by Baazov and his brother Josh Baazov.
Last March, the AMF named David Baazov along with two other individuals on suspicion of aiding in stock trades. A total of five charges were levied against Baazov.
The AMF also obtained search warrants for 13 others including Josh Baazov, and ordered those named to cease stock trading.
Baazov founded Amaya in 2004 and the company focused on business-to-business gaming products over its first decade in operation. That changed when Baazov convinced a series of high-profile investors to bankroll his $4.9 billion purchase of PokerStars and Full Tilt Poker in 2014.
Quebec authorizes allege Baazov gave stock tips on Amaya to Josh and Levett, who then dispersed the information to friends, family members, and business colleagues. In exchange for circulating the tips, David purportedly received a 10 percent kickback on any net profits.
Baazov, through his lawyer, continues to deny the allegations. Baazov has pled not guilty.
“He is innocent of any wrongdoing and eager to present his defense,” Baazov attorney Ian Robertson said in an email to Canada’s Financial Post. “He did not receive anything.”
The AMF documents claim the systematic criminal corruption dates back some six years, long before Amaya became a household name after snagging up the Oldford Group and its star child PokerStars.
Robertson asked a Montreal court last week to expedite the AMF tribunal and to release the alleged documents that prove Baazov’s guilt. Baazov is due back in court on November 23.
Baazov resigned from his executive capacities with Amaya last month. However, he remains the company’s largest shareholder.
Many believed the alleged corruption on the part of Baazov was tied only to the buildup of Amaya’s purchase of PokerStars. Shares of Amaya skyrocketed in the months leading up to the June 2014 announcement.
But now Baazov’s corruption is allegedly much deeper. That could impact PokerStars’ chances of inclusion in any forthcoming California online poker legislation.
A concerted online poker effort led by California Assemblymen Adam Gray (D-District 21) and Reggie Jones-Sawyer (D-District 59) is expected to hit Sacramento when the state legislature reconvenes in January.
Now that the racetracks seem to be satisfied to sit out in exchange for up to $57 million in online poker taxes being delivered their way each year, the primary issue is bringing the Native American tribes together. At last count, the tribes remained split on whether “bad actor” internet poker networks like PokerStars should be immediately allowed to enter the market should it become legalized.
Some believe PokerStars needs to be penalized for illegally operating in the US between 2006 and 2011, while others feel it’s water under the bridge.
The new AMF claims will give the former that much more ammunition.