Amaya maintains innocence over insider trading investigation

amaya-davidbaazov
David Baazov

Amaya has reiterated that it believes the company has done nothing wrong after a Quebec court’s decision to lift the publication ban on the redacted warrant and supporting affidavit for the search of various entities, including Amaya, in mid-December 2014 by Quebec’s securities regulator AMF.

The searches were related to the AMF’s investigation into trading in Amaya securities leading up to the announcement of Amaya’s USD$4.9bn acquisition of Oldford Group (the ultimate owner of PokerStars and Full Tilt) in 2014.

However Amaya says that the documents contain nothing that makes the firm any less confident in its stance. It said: “The release of the redacted documents presents nothing new to Amaya. Amaya has previously received the redacted affidavit and reviewed its limited contents and did not contest the court’s decision today. It will wait to see the actual unredacted affidavit, but it does not believe there is a reasonable basis for proceedings against Amaya or its employees.”

Ben Soave, retired Chief Superintendent of the RCMP, And a member of Amaya’s Compliance Committee and an advisor to the Board of Directors since 2012, added: “We have thoroughly reviewed the relevant internal activities around its acquisition of Oldford Group and have found no evidence of any violation of Canadian securities laws or regulations including tipping and insider trading by CEO David Baazov and CFO Daniel Sebag. Additionally, the company has not been provided with any evidence that any executives, directors, or employees violated any securities laws or regulations.”

In this affidavit for the search warrant, the AMF had said: “The investigation reveals that certain individuals in possession of privileged information transmitted that information to several people. These people then took advantage of that information and traded on Amaya shares.”

As well as Amaya’s offices, the offices of Canadian investment bank Canaccord Genuity, and a subsidiary of Canadian insurance company Manulife Financial were raided as part of the probe.

Amaya reiterated that the AMF investigation has not resulted in any proceedings and no charges have been filed. Amaya said it is confident that at the end of the investigation the AMF will conclude that if there were violations of Canadian securities laws, they were not committed by ‘the company, officers or directors’.

Certain documentation related to the investigation are currently sealed by court order and Amaya has not been able to discuss the details of their contents without risking being in contempt of court. This means Amaya has not been and is still not permitted by the court to comment on individuals named in the investigation documents.

Amaya said it has also yet to obtain an unredacted version of the affidavit since the investigation was first announced. A court ordered seal remains in place related to details of the warrant and the redacted contents of the affidavit.

Amaya added: “Upon request, the company has provided regulators with a large amount of publicly accessible information that occurred in the time period leading up to the transaction, including the following:

  • The Oldford Group transaction was of significant magnitude and scale, with a long list of external bodies necessarily apprised of the transaction prior to its announcement including government agencies, justice officials, gaming regulators, the stock exchange, banks, funds, law firms and consultants.
  • From the day before Amaya signed a letter of intent in January, 2014 to acquire Oldford Group until May 15, 2014, while the company conducted due diligence and worked with external bodies, the price of Amaya’s stock declined. The stock price rose considerably in the week following Amaya’s Q1 2014 press release on May 15, in which the corporation stated it had secured new debt that gave it access to $300 million which could be used to support organic growth and/or a strategic acquisition. Additionally, the corporation provided its 2014 financial guidance and announced that it had provided common share purchase warrants to the lender of the new debt which were priced at $15, approximately double Amaya’s stock price at that time.
  • Analysts published reports subsequently that noted Amaya’s history of acquisitions and anticipated Amaya was pursuing a transformative acquisition, with one notably speculating we were looking to buy a poker company to replace the one we had put up for sale.

“Due to this run up, fuelled by speculation from a media report and a post on a stock chatroom, Amaya anticipated an investigation and has been fully cooperating with regulators since approximately one week after it announced its acquisition of Oldford Group on June 12, 2014, and has been required to maintain strict confidentiality during the process. Amaya will continue to cooperate with the regulatory authorities.”

Check Also

BGC dismisses ‘arbitrary’ deposit limits in SMF report

The Betting and Gaming Council (BGC) has hit back at proposals made by The Social …

ITV secures three-year British racing broadcast deal

British racing will remain on ITV until 2023 after the broadcaster signed a new agreement …

Bet.Works agrees new partnership with Sports IQ

Sports IQ has agreed to make its full suite of products available to Bet.Works after …