Posts Tagged ‘Baazov’

Former Amaya Gaming CEO David Baazov Trial Date Set

 Former Amaya Gaming CEO David Baazov Trial Date Set

In a case that is now dragging on into its second year regarding a transaction from 2014, former Amaya Gaming Chief Executive Officer David Baazov now has a date set for his trial on insider trading charges.

In proceedings held last week in the Quebec Court, Judge Claude Leblond scheduled the start of Baazov’s trial for a November 20 start date. Counting in holidays, the lawyers concluded that the trial will take about 13 weeks as the prosecution plans an extensive case. The attorneys for the Autorité des marchés financiers (AMF), the province of Quebec’s equivalent of the U. S. Securities and Exchange Commission, have called the case against Baazov and two defendants the “largest insider trading investigation in Canadian history” and plan to call around 50 witnesses.

Other than the sheer number of witnesses (including some that potentially could testify via videoconference), there are other problems that are lengthening the potential trial. The trial will be conducted in French (Quebec’s provincial language) because, as explained by the Toronto Globe and Mail, the case is a penal proceeding under Quebec’s securities act. Leblond has stated that an attempt to seat a bilingual judge will be taken and that the case will have all proceedings translated as close to simultaneously as possible. The evidence in the case, strangely enough, will be presented in English.

There is no list of witnesses at hand, but employees from Amaya’s investment bank, Canaccord Genuity Securities, are expected to be called. Additionally, at least one “informant” not named previously in court documents will be called to testify, although there is no information as to whether than informant will testify anonymously or not.

The case dates back to 2014 in what was – and still is – the largest online gaming transaction in the industry’s history. The #1 online poker website in the world, the privately owned PokerStars, was approached by Amaya Gaming and Baazov early in the year about a potential buyout of the family ownership behind PokerStars, the Scheinbergs. Negotiations moved quickly and, by June, the $ 4.9 billion transaction was complete for the online operations and all other pertinent properties.

What the AMF were concerned about was the period prior to the actual completion of the transaction. In unveiling their case a year ago, the AMF alleged that Baazov and two other men, Benjamin Ahdoot and Yoel Altman, utilized the information they had regarding the potential deal to make stock trades “while in possession of privileged information.” Along with the trio, three companies – Diocles Capital, Sababa Consulting and 2374879 Ontario – are also charged with insider trading and attempting to alter the fair market price of Amaya’s stock. Baazov also faces a communication of privileged information charge along with the other two charges.

There seems to be at the minimum smoke where the alleged fire is located. Prior to the sale, Amaya Gaming stock was trading around $ 7.50 per share on the NASDAQ boards but, as the information emerged that the deal was imminent, the share price soared over $ 35, nearly a five-time increase. Even today, the stock for Amaya is still trading around $ 15 ($ 14.50, to be exact).

Baazov has had a tumultuous history since the allegations came out in 2016. Since the charges were brought against him, Baazov has looked to stay in charge at Amaya Gaming before eventually taking a “leave of absence” that became permanent at the end of last year. He has also entertained the notion of buying PokerStars from Amaya Gaming and taking it back into private ownership. In December, that potential deal fell through, even though Baazov and his investors were offering more than what the stock was worth at that time ($ 24 per share, a 30% increase over its board price).

Even with the trial date set, there is still the potential for the AMF and the defendants to strike a deal and avoid any court proceedings. This is a fact that isn’t being ignored by either side as the attorneys are not making any statements to the press regarding the case that could affect any deal discussions. If convicted of the charges they face, Baazov and company would face stiff fines and potentially lengthy jail time.

Poker News Daily

Information Regarding Baazov Insider Trading Trial Comes to Light

 Information Regarding Baazov Insider Trading Trial Comes to Light

Former Amaya Gaming Chief Executive Officer David Baazov has been aggressively fighting the charges of insider trading brought against him by the Canadian government earlier this year. In details released by the Toronto Globe and Mail earlier this month, further information regarding that case is coming to light.

Per Globe and Mail reporter Nicolas Van Praet, the attorneys for Baazov are accusing Canadian prosecutors of several missteps. First, Baazov attorney Sophie Melchers has stated that there have been massive dumps of information which are requiring extensive research by her staff. In addition to this, Melchers says the information being provided is insufficient to provide an adequate defense. Melchers points out an accusation from the prosecution that she is looking to have adjudicated for further clarity.

In their briefs, the Autorite des Marches Financiers (AMF), the government oversight agency from the Canadian government, alleges that Baazov used “fronts” to disguise trades that he made (more on this in a bit). Melchers counters that, since the AMF and government prosecutors don’t name these “fronts,” that she cannot properly prepare to defend them. “He’s being accused of trading via a front that’s not identified, with sums owned by an entity that’s not identified, on dates that are not identified,” Ms. Melchers is reported to have said of Mr. Baazov by Van Praet. “All those ingredients, we don’t know them.”

In attempting to clarify the information at hand, Melchers is requesting that the judge in the case direct the prosecution to disclose this mysterious information. In the courts of Canada, it is known as a “prete-nom,” or an actual naming of the situations where Baazov used some sort of alias to shield his identity from knowledge. It would also force the prosecution to not only clarify the names but also the time periods and other deeper details in the case.

Without this information, Melchers says it is impossible to be able to defend Baazov. “Today, nine months after charges were laid, it’s clear that the AMF’s evidence is incomplete,” Van Praet quotes Melchers as informing the court. “We don’t know the scope of what we should still expect.”

Baazov rocked the online poker world when he was able to negotiate the sale of PokerStars, then a privately-owned equity by the Scheinberg Family, to the publicly traded Amaya Gaming. The $ 4.9 billion deal by far was the largest in online gaming history and created one of the largest online gaming corporations in the industry when it took place in 2014. After some investigation, however, Canadian authorities weren’t sure of the legitimacy of some of the other actions surrounding the deal.

As usual after such a massive deal, the AMF began an investigation in 2014 and, in March of this year, decided they had enough evidence to proceed. Baazov and two associates, Benjamin Ahdoot and Yoel Altman, were all charged with different violations of insider trading laws. Baazov was charged with aiding in trades while in possession of privileged information, influencing or attempting to influence the market price of a stock (in this case, Amaya Gaming) and communicating privileged information. Ahdoot, Altman and three other companies – Dioclese Capital Inc., Sababa Consulting Inc. and 2374879 Ontario Inc. – are charged with aiding in trades while in possession of privileged information and influencing or attempting to influence the market price of a stock.

There is base evidence through the rocketing stock price that occurred around the sale point of PokerStars to Amaya Gaming. Prior to the sale, Amaya Gaming stock was trading around $ 7.50 per share on the NASDAQ boards but, as the information emerged that the deal was imminent, the share price soared over $ 35, nearly a five-time increase (currently Amaya Gaming stock is trading at $ 14.15 per share, still an 88% increase over its 2014 price). The AMF is alleging that Baazov and his cohorts, through their knowledge of the sale, bought Amaya stock at the low point and were the beneficiaries when the price hit its peak, the clearest definition of insider trading if there is one.

The trial in penal court in Toronto is continuing now, but it appears there is still quite a bit of posturing that the attorneys are taking. Poker News Daily will continue to monitor the situation.

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David Baazov No Longer Pursuing Amaya Acquisition

 David Baazov No Longer Pursuing Amaya Acquisition

Former Amaya, Inc. CEO David Baazov has ended his bid to purchase his former company and take it private. His offer was for CAD $ 24 per share, a 30 percent premium over Amaya’s stock price on November 11th, the date the offer was made. The total deal would have been worth nearly CAD $ 3.5 billion.

In a micro-statement on Tuesday, Amaya confirmed that the deal was off, saying, “Amaya Inc. (NASDAQ: AYA; TSX: AYA) confirmed today that discussions with its former Chief Executive Officer, David Baazov, regarding the offer to acquire Amaya by an entity to be formed, have terminated.”

Baazov also issued a statement to the media, explaining, “It became evident that the share price premium demanded by certain shareholders exceeded the price at which my investors and I would be willing to complete a transaction.”

It seems that the mention of “certain shareholders” might be a reference to SpringOwl Asset Management’s CEO Jason Ader, who wrote a letter to Amaya’s current CEO earlier this month objecting to Baazov’s offer, even going so far as to encourage the company to stop associating with its former boss altogether.

In the letter, Ader was very critical of Baazov himself, citing the insider trading scandal of which Baazov is currently the center and a $ 870 million judgment against Amaya in the Kentucky domain name seizure case, among other reasons.

The insider trading case goes back to when Amaya bought PokerStars parent Rational Group for $ 4.9 billion in June 2014. In March of this year, the Autorité des marchés financiers (AMF), Quebec’s financial regulator charged Baazov and others with insider trading, saying he engaged in “aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya inc., and communicating privileged information.”

Baazov took a look of absence from Amaya shortly after the charges were made and eventually resigned in August.

In September, the AMF further accused Baazov and his cohorts of directing a kickback scheme to reward each other for insider information which led to trading profits. Kickbacks consisted of things like cash, checks, a $ 13,000 Rolex watch, and even allegedly a ten percent profit distribution for the people involved in the PokerStars acquisition.

When the announcement was made earlier this week that the deal had fallen apart, Amaya’s share price tumbled before the market’s open. On Monday, Amaya’s stock closed at USD $ 14.45 per share, but opened on Tuesday at USD $ 13.40, a drop of more than 7 percent. But as often happens, it rebounded over the course of the day, finishing at USD $ 14.25, down less than 2 percent.

Even though Baazov seemingly took a shot at Ader in his statement, it almost certainly wasn’t just Ader who didn’t like the deal. Beyond the dubiousness of Baazov’s involvement, the funds to buy Amaya were coming from an odd web of foreign investors. It would have been a complicated, highly leveraged transaction and was probably not worth the risk.

Poker News Daily

Ex-Amaya CEO David Baazov Makes $3.48 Billion Offer to Buy Company

 Ex Amaya CEO David Baazov Makes $3.48 Billion Offer to Buy Company

Amaya Inc., parent company of PokerStars, announced on Monday that it has received an offer from former CEO David Baazov to purchase the entire company. The offer price is CAD $ 24 per share, making the total deal valued at approximately CAD $ 3.48 billion.

Amaya’s stock price closed at CAD $ 18.34 on Friday, so Baazov’s offer represents a healthy 31 percent premium. Shares have leapt on the news, opening Monday morning at CAD $ 21. They are currently at CAD $ 21.50, a more than 17 percent increase from Friday’s close.

Baazov owns 17.2 percent of Amaya; his offer is not technically directly from him, but rather from a company that has yet to be created of which he will be the head. He also, as one might expect, will not be fronting all of the capital required to make the purchase. Four funds are contributing to the effort.

Baazov was the CEO of Amaya when the company bought the Rational Group, the firm that owned PokerStars, back in June 2014 in a stunning deal worth nearly $ 5 billion.

In March 2016, Baazov was charged by the Quebec’s financial regulatory body, the Autorité des marchés financiers (AMF) with insider trading in connection with the PokerStars purchase. The AMF said he was involved with “aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya inc., and communicating privileged information.”

Shortly after the charges were filed, he took a leave of absence from Amaya. In August, he made that departure permanent, resigning from his post at the company. The news got worse for him in September, as the AMF accused he and others of putting together a kickback scheme to reward each other for insider information that led to trading profits. Kickbacks allegedly took the form of cash, checks, and even jewelry like a $ 13,000 Rolex watch. There is even evidence of an alleged 10 percent profit distribution to people involved in the 2014 PokerStars sale.

Amaya issued a statement on Baazov’s acquisition offer. It has been reprinted below:

Amaya Inc. (NASDAQ: AYA; TSX: AYA) confirmed today that it has received a non-binding all cash offer from its former Chief Executive Officer, David Baazov, on behalf of an entity to be formed to acquire Amaya at a price of CAD$ 24.00 per common share. Amaya also confirms that the offer provides for a USD$ 200 million deposit into escrow upon execution of a definitive agreement in respect of a potential transaction that would be converted into a one-year structurally subordinated, interest bearing debt obligation to fund a portion of the USD$ 400 million deferred purchase price for Amaya’s acquisition of the Rational Group in August 2014, such amount to be convertible into equity following the closing of such potential transaction.

The Board of Directors of Amaya, with the assistance of its advisors, will consider Mr. Baazov’s offer.  Shareholders of Amaya do not need to take any action with respect to any offer at this time. Amaya intends to provide updates if and when necessary in accordance with applicable securities laws.

As of the time of this release, there can be no assurance that Mr. Baazov’s offer or that any future bid or offer will ultimately result in a completed transaction.

Poker News Daily

AMF Documents Evidence of Alleged Insider Trading Kickback Scheme Involving David Baazov and Friends

 AMF Documents Evidence of Alleged Insider Trading Kickback Scheme Involving David Baazov and Friends

Hearings have begun in Quebec to discuss the insider trading case involving former Amaya CEO David Baazov and thirteen of his associates, which include family, friends, and business colleagues. According to CTV News Montreal, two days of hearings in front of a financial sector independent tribunal began on Monday. Baazov has been hit with a number of charges, including “influencing or attempting to influence the market price” of Amaya stock and “communicating privileged information.”

Quebec’s financial regulatory body, the Autorité des marchés financiers (AMF), has documented an entire scheme in which it alleges that Baazov and others traded insider financial information in exchange for kickbacks. LaPresse made the AMF’s allegations public, which said that the scheme was of a “high level of organization and sophistication.”

The scheme, according to the AMF documentation, dates back six years, before Amaya acquired PokerStars’ parent company for $ 4.9 billion in June 2014. LaPresse wrote of the allegations (translated from French), “Several agreements were reached between the respondents to provide for the payment of dividends to be paid to [participants], and they were negotiated before the offenses.”

Kickbacks took many forms, from cash to checks to, in one case, a Rolex watch valued at $ 13,000.

The AMF says the scheme was clearly well-thought out and structured. For instance, the baker’s dozen involved allegedly rewarded each other with 10 percent of the net profits gained from any transactions in which they benefited from their information trading. The AMF estimates that the confidantes profited about $ 1.5 million from their insider dealing.

In late March 2016, David Baazov took a voluntary leave of absence his roles as CEO and Chairman of the Board of Amaya after he was indicted on the insider trading charges. At the time, he was supposedly working on a deal to acquire Amaya himself and take it private, so that was used as a partial excuse for his stepping away (he needed to “focus” on the acquisition package).

At the time, he said, “These allegations are false and I intend to vigorously contest these accusations. While I am deeply disappointed with the AMF’s decision, I am highly confident I will be found innocent of all charges.”

In August, he resigned altogether, saying, “I am proud of my contributions in building Amaya into the successful company it is today, and continue to be supportive of its strategy and management.”

David Baazov continues to maintain his innocence despite the evidence mounting against him. ““I want to reiterate that David Baazov is innocent, that he did nothing wrong and that he is eager to present his defense in court,” one of Baazov’s representatives said.

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