AMF Data Leak Could Derail David Baazov Insider Trading Trial

Posted on: May 25, 2018, 12:00h. 

Last updated on: May 25, 2018, 10:36h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Someone at the Autorité des marchés financiers​ (AMF) has blundered and it’s a mistake that could cost the Quebec securities regulator its case against former Amaya chairman and CEO David Baazov.

David Baazov trial
David Baazov, once the golden boy of the online gaming industry, is on trial in Montreal accused of insider trading. On the evidence of the prosecution’s most recent slip-up, he needn’t be too concerned. (Image: National Post)

The AMF is prosecuting Baazov, two other men, and three companies, for alleged insider trading related to Amaya’s $4.9 billion takeover of PokerStars in 2014, as well as several other Amaya acquisitions. Amaya has since changed its name to the Stars Group, in part to distance itself from the scandal.

But the AMF seems to have dropped some insider information of its own – by mistake. According to a court filing this week, the organization accidentally shared over 300,000 privileged prosecution documents with the defense.

Now, six weeks into the trial, it wants them back,

Constitutional Rights Violation

For a defense team that has repeatedly asked for a stay of proceedings in the case, this is a gift. Baazov’s lawyers are once again entreating the judge to stop the case, accusing the prosecution of an “abusive procedure.”

“The defendants — who are entering week six of a trial which will require at least 12 more weeks before the parties complete their proof — will no longer have access to more than 320,000 documents which had been disclosed to them,” the motion reads. “Denying access to the defendants of such evidence in the middle of an ongoing trial violates their fundamental constitutional rights,” it continues.

“The repeated errors committed by the AMF in matters wholly within its control [lead] to the inevitable conclusion that only a stay of proceedings can put an end to these abusive proceedings,” it concludes.

A stay of proceedings halts the legal process and can often be used as means of derailing a trial indefinitely.

AMF Has Previous

 It’s not the first blunder the AMF has made in the Baazov case. According to court filings, when its officers raided Amaya’s Montreal head office in December 2014 to seize email and phone records, they forgot to seize their prime suspect’s cellphone. When they returned, having realized their mistake, they found Baazov had replaced it with a new one.

Baazov was the golden boy of the gaming sector when he engineered the highly leveraged takeover of PokerStars by Amaya, transforming a relatively unknown Canadian online gambling software provider into one of the world’s biggest online gambling companies.

But in March 2016, the AMF filed criminal proceedings against him following a 15-month investigation. He was charged with five counts of insider trading, including “aiding 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.”

He pleads not guilty.