A legal fumble is threatening to derail the entire case against former Amaya CEO David Baazov and two other men for insider trading relating to Amaya’s purchase of PokerStars back in 2014.
Baazov’s lawyers are alleging that Quebec’s securities regulator — the Autorité des marchés financiers (AMF) — accidentally shared private information with the defense. Specifically, the AMF is accused of sharing more than 300,000 privileged documents.
The problem is that six weeks into the trial, AMF wants the documents back. Baazov’s defense is calling it an “abusive procedure” and looking to get charges in the case stayed. It’s the third time lawyers have attempted to get the charges tossed.
Baazov faces five charges in total including influencing or attempting to influence the market price of Amaya’s securities.
Defense claims “violation of rights”
Earlier this month lawyers for AMF asked the judge to remove the aforementioned documents from disclosures.
Baazov’s representation quickly responded by filing a motion for a stay of charges for all defendants citing “repeated errors.”
The lawyers claimed that denying access to evidence in the middle of an ongoing trial represented a “violation of their rights”.
The trial is currently in week seven and scheduled to get at least 11 more weeks before the parties complete their proof.
Lawyers from Baazov also represent Benjamin Ahdoot and Yoel Altman. The legal team has already attempted to get the charges dropped two times before.
The first time lawyers moved to have the charges tossed due to an unreasonable delay in getting them to court. The second time lawyers argued the prosecution was late in disclosing evidence.
The judge, Salvatore Mascia, rejected both motions.
Stars Group stock hits record high
When Amaya purchased PokerStars for $4.9 billion in 2014 it instantly became the biggest online poker business in the world. Forbes hailed Baazov as the new “King of Online Gambling”.
The honeymoon didn’t last long. Baazov took an indefinite leave of absence in the spring of 2016 after the AMF filed five charges against him. Specifically, Baazov was accused of sharing private information with investors prior to Amaya’s purchase of PokerStars. The investors then used the information to buy up company stock months before the stock price peaked.
Since then, Rafi Ashkenazi has taken the reins of the company as CEO. He both moved the organization to Toronto and rebranded Amaya as The Stars Group.
Baazov’s ongoing case hasn’t seemed to have much of an effect on the Stars Group. The company just posted another solid annual earnings report thanks in large parts to its efforts to diversify with rapidly expanding casino and sports betting operations.
The Stars Group stock price hit a record-high of $47.30 CAD earlier this month. The company’s stock has been on the rise ever since it announced a potentially game-changing deal to purchase Sky Betting & Gaming for $4.7 billion in April. Stars stock has remained fairly steady over the last seven days hovering around the $46 mark.
It’s easy to forget that Baazov also attempted to take PokerStars private in 2016 but was ultimately unsuccessful. As of 2017, Baazov still owned a four-percent stake in the company, however.
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High-profile Baazov case continues
The case against David Baazov continues to make headlines in Canada. Some are calling it the biggest alleged case of insider trading in the country’s history.
Regardless of what happens with the new motion, the AMF has taken some heat over its handling of the high-profile case. Baazov’s lawyers have already filed to get the charges dropped due to delays in the proceedings.
In addition, a rabbi named Momi Pinto sued the AMF for infringing on his family’s rights in a raid that took place in their home. The raid was in relation to the Amaya case.
The judge in the Baazov case, Salvatore Mascia, will consider the new request to stay the charges this Thursday.