David Baazov insider trading trial to feature anonymous informant


amaya-baazov-insider-trading-trialFormer Amaya Gaming CEO David Baazov will stand trial on insider trading charges in a Quebec court in November, a judge ruled on Tuesday.

According to a report in The Globe & Mail, Quebec Court Judge Claude Leblond held a hearing on Tuesday during which he set a November 20 date for the start of Baazov’s trial on insider trading stemming from his former role as head of Amaya, the parent company of PokerStars.

The possibility remains that Baazov (pictured), who has pled not guilty to the charges, could strike a deal with prosecutors that would preclude the need for a trial. In the meantime, both prosecutors and Baazov’s legal team are gearing up for a trial that could last up to 13 weeks.

In March 2016, Baazov and two other individuals – fellow Amaya exec Benjamin Ahdoot and former Amaya financial advisor Yoel Altman – were hit with 23 insider trading charges by Quebec securities regulator Autorité des marches financiers (AMF).

Three companies – Diocles Capital Inc., Sababa Consulting Inc. and 2374879 Ontario Inc. – were also charged in the case. The AMF has accused Baazov of using a front to disguise stock trading activity in advance of Amaya’s $4.9b acquisition of PokerStars in 2014.

The AMF has also accused Baazov of engaging in a sophisticated kickback scheme in which he gave advance notice of major Amaya transactions to a number of individuals, including his brother Josh/Ofer Baazov. These individuals’ trading activity earned at least $1.5m in illegal profits, some of which allegedly ended up back in Baazov’s pocket.

The AMF reportedly plans to call around 50 witnesses to support its case against Baazov, including employees of Amaya’s investment banker Cannacord Genuity Securities. Ominously, the AMF also plans to summon an anonymous informant.

Complicating matters for Baazov is the fact that Quebec’s securities act requires that the trial be conducted in the French language. Many of the witnesses don’t speak French but Judge Leblond said preparations will be made to ensure real-time translation of the proceedings, as well as the selection of a fully bilingual judge to hear the case.

It remains to be seen how strong a case the AMF has against Baazov and his co-accused. Last September, Baazov’s lawyer Sophie Melchers got the AMF’s lead investigator to admit that he didn’t actually know the content of messages Baazov sent to his alleged conspirators because investigators had failed to seize it during their December 2014 raid on Amaya HQ.

Baazov resigned as Amaya’s CEO last August but remains the company’s largest shareholder. He has made several abortive attempts at acquiring the company and taking it private, but the last of these attempts fizzled out in December following a series of awkward media stories in which some of his financial backers pleaded ignorance of their involvement.