Former Amaya CEO Sues AMF for Abusive Allegations

Former Amaya CEO David Baazov has filed a lawsuit against Quebec’s securities regulator after its insider trading lawsuit against him was dismissed last year. The Baazov lawsuit accuses the AMF of being “abusive” and “malicious” prosecution.

Background To Baazov Lawsuit

When David Baazov started Amaya as an electronic poker table company, he found some initial success. He then bought PokerStars and Full Tilt Poker, and in 2014,  turned his company into a global gambling force and massively successful publicly-traded company.

It all began to fall apart in 2014, though, when the Autorité des marchés financiers, better known as AMF, raided the Amaya offices in Toronto. In 2016, Baazov and several others were charged with securities fraud.

And while he fought the charges, the implications hurt the company.

Baazov eventually took a leave of absence and resigned.

A judge dismissed the case against Baazov in the summer of 2018. However, the damage was done.

In March 2019, Baazov launched his own attack by filing a lawsuit against AMF on the basis that the charges against him were abusive and malicious.

Seeking $2 Million…For Charity

The Baazov lawsuit was filed in the Quebec Superior Court. The 25-page statement of claim alleges that the insider trading charges against him were abusive and malicious. And he is suing for $2 million.

Sylvain Theberge, a spokesperson for AMF, responded only to say that the regulator will vigorously defend itself against the “unfounded” claims in the lawsuit.

Should Baazov win his case, he claims he will donate the $2 million to five charities based in Montreal.

How It Started

As Baazov was building the company through from 2005 to 2010, he had big dreams for Amaya. He started by buying other gaming companies and wrapping them into Amaya.

Baazov then watched what happened in the United States beginning in April 2011, when the US Department of Justice seized the domains of the two largest online poker sites in the world – PokerStars and Full Tilt Poker. It subsequently indicted nearly a dozen company executives from those two companies, along with UltimateBet and Absolute Poker. The move essentially shut down the online poker market in the US. Furthermore, Full Tilt ended up folding and leaving millions of poker players without their account balances.

PokerStars eventually picked up the pieces of Full Tilt’s mess in order to settle with the US government. Meanwhile, Baazov watched it all play out with interest. Ultimately, PokerStars ended up acquiring Full Tilt’s remaining assets from Isai and Mark Scheinberg for $4.9 billion.

The deal sent shock waves throughout the poker community, and the traders soaked it up. The stock price of Amaya went from just under $11.50 before the deal to more than $38 per share by November of 2014. And AMF, the Quebec gaming financial regulator, was suspicious.

AMF raided the Amaya offices in December 2014 with eyes on the computers and documents of Baazov and two others. Two investment banking firms – Canaccord Genuity and Manulife Financial – associated with the Oldford Group deal also experienced AMF raids.

How It Fell Apart

Baazov continued to run Amaya into 2016, but AMF eventually filed charges against him. This included five charges relating to influencing or attempting to influence Amaya’s market price and communicating privileged information. Friends and associates were charged for trading Amaya shares while in possession of said privileged information. Also charged was Baazov’s brother.

The men were all charged and faced fines and possible prison terms for participating in the illegal trading activities and profiting to a cumulative tune of $1.5 million.

Amaya stood by its CEO at first, as Baazov immediately pleaded not guilty to all charges.

The charges and the publicity surrounding Baazov began to weigh heavily on Amaya, though. Consequently, Baazov eventually took a leave of absence from the company. But when the case dragged on without resolution, Baazov did resign from the company entirely in August 2016. An interim CEO Rafi Ashkenazi then took over as the new official CEO.

Three months later, Baazov announced that he wanted to buy the company back and made an all-cash bid of $24 per share. He and some financial backers offered to help put together the $400 million required to complete the deal. Amaya rejected the offer.

Baazov Lawsuit Filed As Dismissal Not Enough

In June 2018, after numerous court delays and requests from Baazov to dismiss the charges, the trial went ahead. Nonetheless, Baazov’s attorneys still presented numerous reasons for a case dismissal.

Judge Salvatore Mascia subsequently issued a ruling to stay all charges. And it came with a scolding of AMF about mistakes made regarding the erroneous disclosure of information, calling it lax and lacking rigour.

Baazov sat on the decision for nearly one year before filing his own lawsuit. It remains to be seen whether it has the merit he hopes it will.

Jennifer Newell

Jennifer Newell

Jennifer Newell has been writing about poker and gambling since 2004. As the online gaming sectors have changed and grown, particularly in the United States and Canada, she has followed it all and written about it for websites like World Poker Tour and PokerScout. In her free time, she runs a small business, reads, cooks, and enjoys music.

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