MONTREAL – Quebec’s securities watchdog alleges friends and associates of Amaya’s CEO and his brother pocketed nearly $1.5 million in profits from insider information they received about acquisitions, including the deal almost two years ago that transformed the Montreal firm into the world’s largest online poker company.
Documents released by L’Autorite des marches financiers accuse Amaya chairman and CEO David Baazov of being “the main source” of privileged information.
Baazov was charged last week with five counts, including influencing or attempting to influence the market price of the securities of Amaya. Two other people and three companies face 18 additional charges stemming from the AMF investigation.
Baazov, 35, has said the allegations are false and he is confident he will be found innocent of all charges.
While details about the case haven’t been disclosed, the documents outline alleged insider trading activity relating to seven transactions since 2011 involving 13 other people, including Baazov’s brother Josh.
Profits from individual investor transactions ranged between $200 to $155,839, according to two reports of the investigations released by an independent administrative tribunal associated with the AMF.
More than $800,000 was allegedly made from trades related to Amaya’s (TSX:AYA) US$4.9 billion purchase in 2014 of the Oldford Group, the parent company of PokerStars and Full Tilt poker.
Isam Mansour of Montreal allegedly made $500,000 by buying and then selling shares in companies associated with the Amaya deals, according to the documents.
The documents also allege that Craig Levett — a friend and business partner of Josh Baazov — his wife and brother made more than $500,000. The others allegedly involved are a web of friends, family and associates who acted on information that was circulated by Josh Baazov, according to the documents.
Among them is John Chatzidakis, an independent Sun Life Financial financial adviser whose contract was terminated after his licence was suspended following the investigation.
Mansour, Levett and Josh Baazov couldn’t be reached for comment.
Chatzidakis had little to say when reached at his home.
“I’m sorry I cannot speak to anybody about any situations,” he said. “But the truth will be known in the future.”
During its investigation, the AMF monitored phone calls and other communications between investors.
Armed with information about an impending acquisition, investors purchased shares in the target firm or Amaya, often for the first time, the AMF alleges. After the deals were announced, causing shares to spike, the investors sold their stock and earned big profits, according to the documents.
None of the allegations have been proven.
The 13 Baazov associates haven’t been charged but they have been ordered not to trade shares or gain access to proceeds from their activities.
The profits were made from acquisitions involving Cryptoptologic Ltd., Chartwell Technology Inc., WMS Industries Inc., Oldford Group, BWIN.Party and the Intertain Group Ltd., the AMF documents allege.
Amaya’s shares have plummeted since the charges were announced last week. They closed down 4.1 per cent to $14.81 in Monday trading on the Toronto Stock Exchange.
Intertain (TSX:IT) said Monday its shares have taken a hit after being named in the AMF documents. After falling from a 52-week high of $20.09 in June, they were up 3.6 per cent to $10 on Monday.
The gaming company said it is disappointed that misinformation and actions of short-sellers have caused harm to its shareholders.
Intertain, which is reviewing its strategic options, said it has received many expressions of interest to buy all or parts of its business.