King Of Online Gambling Charged With Insider Trading By Securities Regulators

The securities regulator in Quebec announced on Wednesday that it had filed insider trading charges against David Baazov, the chief executive officer and largest individual shareholder of Amaya, which owns the PokerStars and Full Tilt Poker brands, the world’s biggest online poker web sites.
The Autorite des Marches Financiers said it had filed five civil charges against Baazov for “aiding with trades while in possession of priviledged information.” Baazov was also charged with influencing or attempting to influence the market price of the securities of Montreal-based Amaya and communicating privileged information.

Amaya CEO David Bazoov at the headquarters in Montreal, Canada. Credit: Corey Hendrickson

The Quebec securities regulator did not say that Baazov had personally profited from the alleged behavior, but charged others it said had traded while in possession of “privileged information,” including Benjamin Ahdoot, an Amaya employee, and Yoel Altman.
Baazov, who had recently launched a bid to take Amaya private, has issued a statement denying wrongdoing and plans to fight the charges. “Mr. Baazov denies the allegations against him, and Amaya believes they are without merit and expects Mr. Baazov will be fully exonerated,” Amaya said in a statement. “Amaya does not anticipate the charges will have any impact on the management or day-to-day affairs of the operating business.”
Amaya’s board also issued a statement backing the company’s CEO and founder. “David Baazov has the full support of the independent members of the board,” said Dave Gadhia, Amaya’s lead director and independent board member, in a statement.

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Forbes, which anointed Baazov the king of online gambling after his audacious $4.9 billion purchase of the owner of Pokerstar, first reported that provincial financial markets regulators had showed up unannounced in December 2014 at the headquarters of Amaya as part of an investigation.
Shares of Amaya plunged by about 20% on Wednesday morning. The company, which has been financially backed by Blackstone, recently managed to launch Pokerstars in New Jersey, where online gambling is regulated. Pokerstars, which has long been surrounded by controversy, had been trying to reenter the U.S. since 2011, when federal prosecutors shut down its U.S. operations, sued the Isle of Man company and indicted its co-founder.