Published On: Thu, Sep 8th, 2016

Former Amaya Gaming CEO David Baazov Involve in Kickback Scheme, Watchdog Says

AMAYA David Baazov

 

 In what is called “the biggest insider trading investigation in Canadian history”,  Quebec’s securities watchdog, Autorité des marchés financiers (AMF) said  it has uncovered a system of insider trading involving former Canadian Amaya Gaming Inc. CEO David Baazov, La Presse reports on Wednesday.

The AMF claim these arrangements were “negotiated before the offenses” occurred and displayed a “high level of organization and sophistication.” The system worked in a pyramid-like fashion with David Baazov being the source of much of the privileged intelligence, the regulator alleges.

According the allegations kickbacks were paid in exchange for stock tips on several impending takeovers,  including the $4.9 billion acquisition of the Rational Group, the parent company of PokerStars. Kickbacks were typically representing 10 per cent of the net profits gained.

The deals extend six years back  – long before Amaya took over gambling behemoth PokerStars in 2014.

La Presse added that the AMF’s investigation had concluded that Baazov with family and friends, including Baazov’s older brother Ofer (‘Josh’) and Ofer’s former business partner Craig Levett,  payed dividends to their people in the form of cash, checks and even luxury items such as a $13, 000 Rolex Daytona watch, the regulator said. The AMF estimates the group made about $1.5 million in profit from the trades. 

Calvinayre reports that : Levett along with his wife, his brother and other confidantes, went on to make trades that netted profits of over $170k from the WMS deal. On Feb. 25, 2013, Levett sent an email to Josh titled “WMS” in which Levett wrote “this is what we owe to your brother. I have a check for him tomorrow.”

 The Globe And Mail says that “in court documents laying out its case against Josh Baazov, David’s brother, and 12 others accused in March of trading on inside information involving Amaya, the AMF says its investigation has found evidence that the group had a refined system that rewarded insider information with kickbacks typically representing 10 per cent of the net profits gained.”

“These were the activities of an organized group that traded regularly on information of numerous mergers and acquisitions still unknown to the public, ” the AMF read in the documents, adding the group used coded language to disguise the specifics of share transactions, evidently to help calculate the exact amount owed via these deals, transfered in their mails and messages to each other. (Refer to Jan 2013 purchase of WMS by rival gaming technology outfit Scientific Games)

Josh Baazov and Levett were once controlling shareholders of BetonUSA, a sports betting company focused on the United States. After BetonUS closed down they were thought to then control the betting site Oddsmaker.com.
Levett also founded the numbered company that eventually became Amaya. According to the AMF, it seems Mansour, Josh Baazov and Levett also all once worked at a consulting company called Blackbelt.
Mansour was said by the AMF to own shares in Zapha Holdings,  a British Virgin Islands business linked to both BetonUSA and Oddsmaker. Baazov’s sister Goulissa was was apparently another Zapha shareholder.

Responding to the allegations made by the AMF Baazov’s attorney has said to the Montreal paper La Presse that his client “is innocent, that he did nothing wrong and that he is eager to present his defence in court.”

Baazov pleaded innocent to charges based on these allegations in court last May, and recently resigned as CEO of Amaya.

The AMF has now scheduled two days of hearings for next week concerning the Amaya affair, commencing on September 12th .

 

 

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