Counsel for former Amaya president and CEO David Baazov and two Baazov business associates had the trio’s insider-trading case stayed because of discovery lapses by the Quebec securities regulator prosecuting the case.
A Quebec judge has dismissed charges against David Baazov, former Amaya, Inc., president and CEO. The judge agreed with a defense claim that the accidental sharing by investigators with Baazov’s defense of some 320,000 “potentially privileged” documents meant that the defendants could not get a fair trial.
The action by presiding judge Salvatore Mascia on Wednesday ends the proceedings against Baazov, Joel Altman, Benjamin Ahdoot, and three corporate entities. The three men faced a total of 23 separate insider-trading charges stemming from an investigation into Amaya’s acquisition of PokerStars’ corporate parent Oldford Group in 2014.
The investigation began with a look at the curious rise in Amaya’s share price for several weeks before the June 2014 deal involving PokerStars was announced. It grew to include several other corporate deals involving Amaya in earlier years. Baazov, the case’s central figure, faced five of the charges.
“Accumulation of mistakes” by prosecution
According to a statement offered by the Baazov’s defense team, Judge Mascia said: “When the circumstances justify it, the courts must stay the proceedings. This is only to be used in the most dramatic cases. There must be no other acceptable solution that might right the wrongs. In this case, do the accumulation of mistakes require a stay of proceedings? Yes.”
The motion to stay the proceedings was the third such effort by Baazov’s defense team. The first such effort occurred late last year, with a follow-up motion offered in early April, when the courtroom trial phase of the trial began. All three motions involved the case’s massive discovery process, a part of what Quebec’s securities regulators, the Autorite des marches financiers (AMF), termed the largest insider-trading case in Quebec history.
According to the defense’s celebratory press statement: “The early weeks of trial were marked by shocking missteps and mistakes by the AMF – including errors about privileged documents, contradictory evidence, and even demands by the AMF that the three men return documents that the AMF had disclosed to them months before.”
“‘We agree with the judge and are happy with the decision,’ the three men said, adding that they will have no further comment at this time.
Baazov and the others were first charged in February 2016, but proceedings were delayed several times due to various circumstances, including the multiple motions to dismiss. Baazov himself was forced out of his twin roles at Amaya, and he sold off most or all of his known holdings in the company in 2017. Baazov also attempted an independent takeover of Amaya following his exit; that takeover attempt fizzled amid questions over two of the four corporate backers claimed by Baazov.
Amaya itself has since rebranded as The Stars Group (TSG) and has relocated from Quebec to Toronto, Ontario.
AMF may appeal dismissal
Still, the final chapter of this high-profile case may be in the future, as the AMF ponders its options. The AMF said in a statement: “We are obviously very disappointed with the judge’s decision. We are going to analyze the judgment very closely as well as assessing the pertinence of filing an appeal.”
The rebuke of bye AMF came during Mascia’s two-hour-long rendering of his decision to stay the proceedings. Mascia highlighted the AMF’s “repeated errors” and “lack of rigor” in explaining the dismissal.
