UPDATE: The Globe and Mail has since reported that CEO David Baazov and CFO Daniel Sebag were among the three Amaya staffers whose documents were seized. Amaya has released a statement saying its own investigation has “found no evidence of any violation of Canadian securities laws or regulations including tipping and insider trading” by either exec.
On Wednesday, a Quebec judge overturned a publication ban on the search warrant executed in December by the Canadian province’s financial market watchdog, the Autorité des Marchés Financiers (AMF).
The documents reveal the AMF was interested in the dealings of 20 individuals employed at Amaya, Manulife Securities Inc. and Canaccord Genuity Corp. The latter two companies played key roles in facilitating Amaya’s $4.9b acquisition of the Rational Group – whose assets included PokerStars and Full Tilt – last June.
The AMF believes some individuals improperly disseminated confidential info ahead of the Rational acquisition. The names of these individuals have been redacted from the warrant, making it unclear how these individuals are related to Amaya. However, Canada’s Globe and Mail newspaper reported that the AMF seized computers, memory cards, other storage devices and documents utilized by the three Amaya employees.
Amaya’s stock went on a tear in the months immediately prior to the acquisition, news of which was first broken here on CalvinAyre.com several weeks prior to the official announcement. Since the AMF launched its investigation last year, the US-based Financial Industry Regulatory Authority has launched its own probe of some 300 investors who made significant Amaya trades prior to the deal.
The AMF began investigating the Rational acquisition after being contacted by two whistleblowers, the identities of whom remain unknown, although one is said to be a Manulife employee. Some 15 staffers at Manulife’s Dorval branch – located just down the road from Amaya’s headquarters – are said to be under investigation for “manipulative and deceptive activity.”
Amaya has repeatedly denied any wrongdoing by its staff while insisting that it will emerge unscathed once the probes have concluded. Amaya shares were down around 1.5% to $31.50 by mid-day. The Toronto-listed Amaya recently revealed its intention to list its shares on the Nasdaq exchange by October.