Amaya Founder and CEO David Baazov Charged with Insider TradingPublished March 24, 2016 by Florin P
The meteoric rise of David Baazov could come to a screeching halt, after being charged for insider trading.
In June 2015 Amaya acquired PokerStars for a record amount of nearly $5 billion USD and since then its stock surged to new highs. The unexpected news of founder and CEO, David Baazov being charged by Quebec's Financial Securities Regulator with insider trading caused the stock price to drop by 18%. This could be the least of David’s concerns if the charges stick, as he could end up serving time behind bars.
Stock Holders Shocked by the Charges
Apparently nobody expected David Baazov and other big players to be charged with insider trading, but Amaya was the most affected company. The AMF broke the news and told the media that the charges are related to the manipulation of stock prices over a period of one year, starting on December 2013.
Benjamin Ahdoot, Yoel Altman, Diocles Capital Inc and Sababa Consulting Inc were also accused of wrong doing, for a combined 23 charges. The first rumors about the ongoing investigations surfaced in late 2015 and they put an end to the steady rise of Amaya stock.
Red Flags in the Wake of the PokerStars Acquisition
David Baazov came a long way from being the owner of a penny stock online gaming company to emerging as the CEO of an industry leader. The acquisition of PokerStars for $4.9 billion USD was supposed to be Amaya’s biggest achievement, but it is more likely to cause David’s downfall. AMF authorities got suspicious after Amaya took over the poker giant and also raided its previous owner, Canaccord Genuity.
Mr. Baazov stated that the allegations are false and that he intends to contest them, while expecting to be found innocent of all charges. These accusations however couldn’t have possible come at a worse time for him, as he intended to take the company private in exchange of a cash offer of CDN$21 a share.