This week was supposed to see the start of Baazov’s criminal trial at the Court of Quebec on criminal charges of insider trading relating to, among other transactions, the 2014 $4.9b acquisition of the Rational Group, the parent company of online gambling giant PokerStars.
But La Presse reported Tuesday that the trial had once again been postponed after Baazov’s legal team made yet another attempt to have the charges tossed, this time on the basis of abuse of process, specifically, that prosecutors keep turning over fresh documents allegedly pointing to Baazov’s guilt.
Baazov’s team claims that the Autorité des marches financiers (AMF), Quebec’s securities regulator, had made nine new disclosures of evidence just three weeks ago. The new evidence includes interviews with individuals caught up in Project Bronze, a parallel AMF investigation into how others may have profited from Baazov’s alleged dissemination of privileged information.
Among the new data disclosed is a September 2015 interview of Baazov by AMF investigators, six months prior to the charges being filed, in which Baazov claims there was no point to tipping anyone off to the impending PokerStars deal because he didn’t think it was going to happen.
Baazov reportedly told investigators that the PokerStars deal “was dead in May 2014” due to legal concerns by financiers JP Morgan, Barclays and Deutsche Bank about the site’s former presence in the American online gambling market.
Baazov claimed that the deal was saved when the Blackrock hedge fund arrived in Montreal to do its due diligence in late May 2014, after which the other bankers rejoined the deal effort on June 5. “They could not commit themselves until Blackrock was there.” The deal ultimately concluded on June 13.
Baazov told investigators that he had “nothing to hide” but an investigator pointed out that “people near you mortgaged their house” in order to purchase Amaya stock. Baazov replied that “these people are crazy. They are 100% crazy.”
The AMF claimed that privileged information disclosed by Baazov to an individual named Michel Frenn was forwarded to the former boss of Manulife Securities in Dorval, Quebec. An AMF investigator claimed “the entire office of Manulife Securities” made trades based on this info to “make mountains of money.” Baazov said this information “surprises me and shocks me.”
In addition to Baazov, insider trading charges were also filed against former Amaya exec Benjamin Ahdoot and Yoel Altman, a friend of Baazov’s and a financial advisor to Amaya. The AMF interview quotes Baazov saying Altman was originally highly pessimistic about the Stars deal going through, saying “it was impossible, stupid and that I was wasting my time.”
Baazov’s legal team claims the AMF interview was improperly conducted because they’d previously informed the AMF that Baazov wouldn’t speak to them voluntarily. The team wants Court of Quebec Judge Salvatore Mascia to rule on whether the Baazov interview will be admissible at his trial. Mascia’s ruling will factor into their decision whether to put Baazov on the stand to testify in his own defense.