David Baazov’s Insider Trading Case Tossed Due to AMF Blunder
Former Amaya CEO David Baazov’s insider trading case was thrown out of a Canadian court on Wednesday. The case was tossed days after the AMF, Quebec’s securities regulator, inadvertently released confidential documents pertaining to the case.
The case involved David Baazov, as well as two co-defendants: Yoel Altman and Benjamin Ahdoot. Though the document release promised to embarrass the defendants, it proved to be a boon for the three men, because it proved that the AMF had withheld key evidence from the defense.
The three gave a joint statement through a public relations company. The statement said, “We agree with the judge and are happy with the decision.”
Baazov, Altman, and Ahdoot said they would offer no other statement at the time. Documents from the case are not available at present, but the judge in the case tossed the prosecution because of the AMF’s blunder.
Amaya’s Purchase of PokerStars
The case stems from Amaya Gaming‘s August 2014 purchase of Rational Media, then the parent company of PokerStars and Full Tilt Poker. Amaya’s buyout of PokerStars was a $4.9 billion deal. When it happened, the PokerStars deal electrified the online gambling world. Amaya was a little-known, but respected, software company based in Montreal.
Eventually, PokerStars gained licensing in New Jersey, in part because Amaya Gaming had a good standing in the United States. Even before the DGE licensed PokerStars, though, a scandal was brewing back in Canada.
David Baazov Charged with Insider Trading
The AMF charged 13 people affiliated with Amaya with insider trading, based upon suspicious trading activity in the weeks before the PokerStars deal was announced. In March 2016, David Baazov was charged with insider trading. He stepped down as Amaya’s CEO at the time, a move which was made permanent in August 2016.
Besides on feeble attempt to purchase Amaya Gaming since then, David Baazov has been focusing on his legal jeopardy. He longer has that proverbial Sword of Damocles over his head.
AMF Releases 300K Confidential Documents
Last week, the prosecution “accidentally shared more than 300,000 documents which were supposed to remain confidential”. The AMF wanted the documents returned, but their release proved that the prosecution had been withholding key evidence from the defense.
Baazov’s defense attorney argued before that court that the AMF’s release of the documents meant that his clients could not receive a fair trial. That set up Wednesday morning’s shocking decision from the judge in the case.
Salvatore Mascia’s Ruling
Judge Salvatore Mascia said that the Quebec regulator had failed to disclose evidence and this required that Mascia give the defendants a stay. Mascia said, “When the circumstances justify it, the courts must stay the proceedings. This is only to be used in the most dramatic cases. There must be no other acceptable solution that might right the wrongs. In this case, do the accumulation of mistakes require a stay of proceedings? Yes.”
Geneviève Régnier, the main lawyer for the AMF, had asked the judge to continue with the case. She said a stay would be a “draconian” measure, because lawyers seldom if ever achieve perfection.
David Baazov Insider Trading Case
The decision by Judge Salvator Mascia brings to an end a 26-month case against David Baazov and associates. In March 2016, the AMF’s lawyers brought charges against Baazov “for aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya inc., and communicating privileged information.”
Amaya Gaming Is Now Stars Group
In March 2016, Rafael Ashkenazi became the interim CEO of Amaya Gaming. In November 2016, Rafael Ashkenazi took over the role on a permanent basis. At the time, David Baazov was talking about a buyout of the company with money from Hong Kong investors — a deal which fell through shortly after and might have never been realistic in the first place.
Since then, Amaya changed its name to Stars Group. PokerStars remains the world’s largest poker site. Stars Group continues to use its resources to add online sports betting and other gaming assets. Rafael Ashkenazi appears to have a solid hold on the company more than two years after he became interim CEO.
David Baazov’s Next Move
As for David Baazov, his next move in the online gambling world is unknown. This time last week, he was contemplating a prison sentence involving a document-based insider trading case. Document cases are easier to prove, because the evidence is in black-and-white.
Now, those documents have saved David Baazov and two of his associates. It is the legal equivalent of winning the Powerball lottery. Perhaps David Baazov should buy a lottery ticket, while his luck holds out.