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Amaya Execs Baazov, Sebag Confirmed as Involved in AMF Stock-Price Investigation

Canadian online gambling giant Amaya Gaming has issued an investor advisory confirming that Chief Executive Officer David Baazov and Chief Financial Officer Daniel Sebag are involved in the ongoing investigation by Canada’s Autorité des marchés financiers (AMF).  The AMF, Canada’s securities regulatory agency, continues to look into the circumstances behind the curious run-up of Amaya’s share price last year.

Amaya’s share price surged roughly 700% in the weeks preceding the firm’s $5 billion acquisition of online gaming market leader Oldford Group in June of 2014.  Oldford Group’s PokerStars and Full Tilt online-poker brands remain the dominant global brands in that segment.

amaya-gaming-logoDespite the confirmation that Baazov’s and Sebag’s pre-acquisition activities are of interest to the AMF, the Amaya confirmation reaffirmed that Baazov and Sebag are not the primary target of the AMF investigators.  In fact, Amaya requested the release of Baazov’s and Sebag’s names in conjunction with the investigation.  At least one other non-executive employee of Amaya is also of interest to the AMF, but that employee’s identity has not been disclosed by Amaya.

Amaya’s Toronto offices, along with those of two investment firms involved in putting the acquisition package together, were the targets of an AMF raid last December.  Selected officers and employees of the two firms, Manulife Financial and Canaccord Genuity, are also believed to be under investigation.

Most of the investigative findings remained sealed under a Canadian court order, pending the filing of any charges in the case.  As the latest update noted, “Amaya is not permitted by law to disclose further details surrounding the AMF investigation.”

An Amaya presser published yesterday noted that, “The AMF has neither announced any proceedings nor filed any charges.”  Suspicion in the investigation has centered on two Canadian investment firms that assisted Amaya in assembling the giant, leveraged package that allowed Amaya to acquire the much larger Oldford Group brands.

Amaya Compliance Committee member Ben Soave stated, “To date, the AMF has neither threatened nor initiated any legal proceedings against the Corporation or its employees. Amaya has also not been provided with any evidence that any officers, directors, or other employees violated any securities laws or regulations.”  Soave is a former Chief Superintendent of the Royal Canadian Mounted Police and also serves as an advisor to Amaya’s executive committee.

Added Soave, “Nonetheless, as we previously announced, the Corporation conducted an internal review, supervised by its independent board members with the assistance of external legal counsel, which thoroughly reviewed the relevant internal activities surrounding the Oldford Group acquisition. This review found no evidence of any violations of Canadian securities laws or regulations.”

Amaya Lead Director and board member Dave Gadhia issued the following brief statement in defense of Baazov and Sebag.  “Amaya’s independent board members have been following this issue very closely and we fully support David Baazov, Daniel Sebag and Amaya’s management team,” said Gadhia, who came to Amaya after a stint as Executive VP and CEO of Gateway Casinos & Entertainment Inc.  Added, Gadhia, “The Corporation is not aware of any reasonable basis for proceedings against Amaya or its directors, officers or employees. We will continue to cooperate with the AMF and intend to provide further updates on the investigation if and when it is permitted.”

CEO Baazov himself commented on the situation, saying, “We have been cooperating with the AMF since the announcement of our acquisition of Oldford Group.  I believe that any concerns that I or other Amaya officers or directors violated any Canadian securities laws are unfounded and we are confident that at the end of its investigation, the AMF will come to the same conclusion.”

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