US law firms file investor lawsuits against Amaya Inc

US law firms Wolf Haldenstein Adler Freeman & Herz LLP (New York) and Block & Leviton (Boston) have filed investor-led class action lawsuits against Amaya Inc.

The lawsuits filed yesterday within US district courts, focus on the alleged investor misrepresentation of Amaya governance following the allegations of insider trading made against CEO and Founder David Baazov by Quebec securities regulator, Autorite des March Financiers (AMF).

At present the AMF in conjunction with the Canadian Police and U.S. regulators are investigating why a set of investors bought shares of Amaya’s stock before its CAD $4.8 billion acquisition of industry stalwart PokerStars, and whether the share purchases were based on any insider information.

The AMF charges against Baazov saw Amaya’s Toronto TSX share price decline approximately 20%, resulting in a loss of market capitalisation for its shareholders of approximately $275 million.

Both law firms claim that Amaya governance had failed investors by not having ‘adequate internal controls’ relating to its leadership, which resulted in significant damage to the company’s value.

Baazov has since taken an indefinite leave from Amaya leadership to address the charges, and further prepare for his planned management takeover of Amaya assets.

Issuing separate statements yesterday, the US law firms urged affected Amaya investors to get in touch with their advisers in order to support the Plantiff.