David Baazov Insider-Trading Charges Dismissed

In something of an upset, a Quebec judge has agreed to dismiss insider-trading charges against former Amaya Inc. president and CEO David Baazov, two of Baazov’s business associates, and three corporate entities. The decision by presiding judge Salvatore Mascia to agree to a defense motion to the stay the proceedings likely ends a saga that stretched nearly two and a half years, and centered on Amaya’s 2014 reverse takeover of PokerStars in a record $4.9 billion deal.

Judge Mascia explained his rationale in a two-hour explanation of his ruling on late Wednesday, taking to task Quebec’s securities regulatory body, Autorite des marches financiers (AMF), for accidentally sharing with Baazov’s defense about 320,000 documents obtained by the AMF via third-party subpoenas. These documents ended up being irrelevant to the case and were thus “potentially privileged”, even if they were just a small portion of perhaps 20 million or so documents collected in relation to the case.

The AMF had asked Baazov’s defense to return the documents and pretend to un-see them, which drew this latest of three separate Baazov motions over the past seven months to dismiss the case. Mascia, in staying the case, cited the AMF for its “repeated errors” and “lack of rigour”.

The previous two efforts by Baazov’s counsel to have the charges dismissed also focused on alleged discovery shortcomings, in those cases involving delays by the AMF in forwarding relevant documents to the defense. Baazov’s defense tried to invoke Quebec’s “Jordan Rule” provisions regarding the right to a timely trial, but Judge Mascia declined to end the case on those occasions, due to the truly massive amount of documentation involved.

Celebratory presser from Baazov

Baazov’s press agency, Daisy Group, issued a brief statement following Mascia’s trial-ending ruling. Here’s the meat of it:

TO – It’s over.

A Quebec Court judge found that the Autorite des marches financiers (AMF) made “repeated errors” and showed “lack of rigour” and therefore threw out the regulator’s prosecution. Judge Salvatore Mascia, in a stunning ruling, found that the Quebec securities regulator had failed to disclose evidence to the three accused men and he had no choice but to stay the charges.

“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,” said Mascia.

He continued: “In this case, do the accumulation of mistakes require a stay of proceedings? Yes.”

The trial involving former Amaya CEO David Baazov and his co-accused, Benjamin Ahdoot and Yoel Altman, got underway in Montreal in April. From the outset, defence lawyers raised objections about their inability to review millions of documents handed over by the securities regulator, and about the confusion and chaos that characterized the AMF’s case.

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 they will have no further comment at this time.

It’s worth noting that some less-than-diligent news outlets have run the above as a straight news story, without a disclaimer as to its source or intent. The above is spin, even if some direct quotes from Mascia’s oratory were included.

There’s also no claim of innocence in the above, not surprising given the known details of the case. It was indeed a dismissal of the case on a technicality.

There’s also the chance that the trial isn’t quite over yet. “We are obviously very disappointed with the judge’s decision,” the AMF said, following the dismissal. “We are going to analyze the judgment very closely as well as assessing the pertinence of filing an appeal.”

Justice likely served in one sense, but not another

This case likely leaves a sour taste in the mouths of many watching the proceedings. Yes, Mascia had good cause to dismiss the case on the technicality, because that’s the way Western justic systems are supposed to work.

Still, there’s little doubt that Baazov and his co-defendants, Yoel Altman and Benjamin Ahdoot, were actually guilty of the activity at the core of that case. In this was there’s a parallel to the high-profile illegal-gambling case involving Asian underground gambling kingping Paul Phua, who set up a temporary gambling business in a private villa at Las Vegas’s Caesars Palace a couple of years back.

Phua, like Baazov here, beat the rap, but that doesn’t mean Phua wasn’t running his illegal underground book. Rather, Nevada and federal investigators broke the rules in trying to nab Phua and his workers; the investigators’ intent was evident, which was why Phua went free.

There’s a different sense in the Baazov case. Here, the AMF wasn’t so much malignant as it was overwhelmed by the sheer volume of evidence, which was the root cause of the delays. Sending 320,000 too many and unrelated documents is a gross fuck-up, but it’s not malignant, anti-justice intent.

So Baazov and his cohorts win on personal justice matters, but it’s no great bit of justice for the greater gambling world, which would be better off without him. The old Amaya under Baazov’s control participated in years of sketchy insider-trading transactions, and that’s not even bringing into the discussion the issue of David Baazov likely serving as an investment “beard” for his older brother, Joshua Ofer Baazov. Older brother Josh is noted for leaving an earlier telemarketing judgment in the US unpaid, and he and his business partner, Craig Levett (also an early Amaya figure) were the owners of the failed oddsmaker.com operation.

Baldly stated, the gambling world needs less of these types around, not more. So Baazov wins here. But does the gambling world win? Maybe not so much.

(The opinions offered here are those of the author, and do not necessarily represent the viewpoints of the owners and publishers of Flushdraw.)


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