After a seemingly miraculous rise to becoming the world’s largest online gambling company, Amaya’s CEO, David Baazov is taking a leave of absence after insider trading charges were leveled against him. Rafi Ashkenazi, CEO of Rational Group will take over the role of chief while Baazov remains on the board of directors with Divyesh (Dave) Gadhia taking over the Chair. Stock trades around Amaya’s acquisition of Rational Group, which operates PokerStars and Full Tilt Poker were the impetus of an investigation that eventually uncovered illegal insider trading in seven companies owned by or associated with Amaya, according to Canada’s AMF.

Amaya (TSX:AYA) completed it’s takeover of Oldford Group, parent of Rational Group for US$4.9 billion in August 2014 creating the largest online gaming company in the world. Stocks went through the roof and over $800,000 was allegedly made in illegal trades related to that transaction. Allegations of insider trading go back as far as 2011 and include at least seven transactions and thirteen people including Baazov and his brother Josh.

Documents point to Josh Baazov being the conduit of information that was spread through a web of friends and acquaintances. Those individuals allegedly bought Amaya shares before acquisitions were announced, and then sold them at a profit once Amaya stock prices rose.

David Baazov denies any wrongdoing and says he will be exonerated of all charges. None of the allegations have been proven and the thirteen associates have not been charged, although they have been directed to cease trading and are not allowed to access funds allegedly derived from the illegal trades.

Amaya stock continues to trade under 15 after falling from nearly 19 before the news of charges against the CEO.

Baazov made a bid to take the company private earlier this month and currently there’s no indication he plans to abandon the idea.

Leave a Reply

Your email address will not be published.