Insider trading charges against former Amaya Gaming CEO David Baazov have been tossed more than two years they were originally filed due to proseuctorial bungling.
On Wednesday, Court of Quebec Judge Salvatore Mascia stayed all charges against Baazov, former Amaya exec Benjamin Ahdoot and Baazov’s friend and financial advisor Yoel Altman, citing the inept prosecution of Quebec securities regulator the Autorité des marches financiers (AMF).
The AMF brought 23 charges against the trio in March 2016 due to a series of questionable share trades surrounding Amaya business transactions, including the $4.9b purchase of the Rational Group, the parent company of PokerStars, in 2014.
The AMF claimed to have the goods on Baazov but the investigation quickly turned into a Keystone Cops affair, with the AMF admitting early on that it had failed to secure crucial phone data. The AMF dragged its heels in disclosing evidence to Baazov’s defense attorneys, then buried them in millions of files shortly before the trial was originally supposed to proceed.
Judge Mascia dismissed two previous defense motions to stay the charges but the defense filed a third motion last month after the AMF claimed it had inadvertently given the defense 320k privileged documents that it now wanted back. The defense claimed that it couldn’t unscramble this egg and argued that three strikes meant the AMF was out at the plate.
In a two-hour oral ruling on Wednesday, Mascia agreed, saying the AMF’s “repeated errors” showed a “lack of rigor” and “laxism,” and that the “accumulation of mistakes require a stay of proceedings.” The AMF issued a statement expressing disappointment with the outcome and saying it would be studying Mascia’s ruling and “assessing the pertinence of filing an appeal.”
Baazov and his co-defendants said nothing before leaving the court, but later issued a brief statement saying only that they “agree with the judge and are happy with the decision.”
Baazov was forced to give up his role as Amaya’s CEO in the wake of the charges and later made several attempts to buy the company and take it private. These attempts were rebuffed and Baazov ultimately sold the bulk of his sizable Amaya holdings.
Amaya eventually rebranded as The Stars Group and has gone on to an even brighter future, including launching its first US-licensed site in New Jersey, being welcomed into the American Gaming Association and recently pulling off the $4.7b acquisition of UK-licensed online operator Sky Betting & Gaming.
It remains to be seen what effect the setback will have on the AMF’s related investigation of numerous other individuals who allegedly profited from insider information provided by Baazov, including his brother Josh/Ofer Baazov, who the AMF has alleged was pulling Amaya’s strings behind the scenes.
