Shares for Amaya slipped over 27% this week as reports revealed that charges of insider trading had been brought against the gambling giant's CEO, David Baazov.
Quebec's securities regulator accused Baazov, who was named by Forbes Magazine as the King of Online Gambling, of "aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya", as well as "communicating privileged information".
A total of 23 charges were filed by the authority, AMF, against Baazov, two other men and three different companies. Benjamin Ahdoot is a close friend of Baazov, while Yoel Altman is an advisor to Amaya. The companies being charged are Sababa Consulting, 2374879 Ontario Inc. and Diocles Capital Inc.
Trading on Insider Information
Search warrants and freeze and cease-trade orders were also ordered by the AMS against 13 other people, including Baazov's brother Josh. These people are accused of trading on insider information and making a profit based on this information of over $1.5 million.
"Offenders are liable to stiff fines as well as prison terms," said AMF president and CEO Louis Morisset. "We have made suppressing illegal insider trading and market manipulation a top priority, as this type of conduct profoundly affects public confidence and the integrity of our markets."
Baazov Denies Wrongdoing
David Baazov has come out against the accusations against him, calling them "false".
"I intend to vigorously contest these accusations," said the CEO. "While I am deeply disappointed with the AMF's decision, I am highly confident I will be found innocent of all charges."
The CEO also obtained the full support of Amaya's board. Lead director, Dave Gadhia said that the charges against Baazov would have no effect on day to day operations of the group.