AMF Investigation into Amaya Continues, Computers and Documents Confiscated

April 9th, 2015 | by Brian Corlisse
AMF investigation Amaya PokerStars acquisition

David Baazov reiterated last week that Amaya had done nothing wrong in the lead up to their purchase of PokerStars and the Rational Group. (Image: Erik Verduzco/Las Vegas Review-Journal)

Amaya Inc. and its employees are still being investigated by the Autorite des Marches Financiers (AMF), the financial regulatory body in Quebec, for supposed misconduct ahead of the $4.9 billion takeover of PokerStars and the Rational Group last year.

The AMF was given approval to confiscate computers, documents and other devices from three staff members, two of whom may be top executives at the company.

The investigation is being conducted because of the sudden and steep increase in Amaya’s stock price in the days before their purchase of the Rational Group was announced.

From the time speculation began on mid-to-late May to the time the acquisition was announced on June 12, Amaya’s stock price increased by about 50 percent, leading regulators to wonder if there was inside information driving the price increase.

Raid in December Made Investigation Public Knowledge

That investigation became public knowledge in December, when AMF officials showed up at Amaya’s Montreal offices to look for evidence related to the trade.

Since then, the US-based Financial Industry Regulatory Authority (FINRA) has apparently also launched an independent investigation into the trading before the PokerStars acquisition, though Amaya has said they are unaware of FINRA’s inquiry.

Following a Quebec court’s decision to lift the publication ban on documents related to the AMF investigation, Amaya issued a statement that said that there was no new information for the company in the now public documents.

“The release of the redacted documents presents nothing new to Amaya,” the statement read. “Amaya has previously received the redacted affidavit and reviewed its limited contents and did not contest the court’s decision today.

It will wait to see the actual unredacted affidavit, but it does not believe there is a reasonable basis for proceedings against Amaya or its employees.”

Investigation Continues, But No Charges Filed

Amaya also noted that while there an ongoing investigation, that’s all that has happened so far, and that the company has not been accused of wrongdoing.

“The AMF investigation has not resulted in any proceedings and no charges have been filed,” read the statement. The company is confident that at the end of the investigation the AMF will come to the same conclusion as Amaya has…that if there were violations of Canadian securities laws, they were not committed by the Company, officers or directors.”

Amaya CEO David Baazov also referenced the investigation during a March 31 earnings call.

“Amaya thoroughly reviewed the relevant internal activities around the Oldford Group acquisition and has found no evidence of any violation of Canadian securities laws or regulations, nor has the company been provided with any evidence that any executives, directors, or employees violated any securities regulations,” Baazov said.

The released documents showed that the AMF had obtained court approval to take possession of electronic storage devices used by three Amaya employees, though the names were redacted throughout the documents. According to a report by the Globe and Mail, some sources have pegged two of those individuals as Baazov and CFO Daniel Sebag.

While the increase in Amaya’s stock price could be seen as suspicious, it’s quite possible that the spike was due to publically available information.

During the time of the stock’s price increase, there were major rumbling both from Amaya and analysts that the company could be looking to make a major acquisition, and PokerStars was one of the few purchases that made sense at the time, leading many investors to make that connection even before the buyout was confirmed.

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