Quebec Judge Dismisses Insider Trading Case Against David Baazov and Associates

Posted on: June 7, 2018, 03:00h. 

Last updated on: June 7, 2018, 01:59h.

A Quebec judge has dismissed the insider trading case against former Amaya CEO David Baazov, saying that the regulators pursuing the case had repeatedly failed to properly disclose documentation to the defense team during the case.

David Baazov charges dismissed
David Baazov saw the charges against him dismissed by a Quebec judge following a series of errors by prosecutors related to the disclosure of documents in the case. (Image: Christinne Muschi/Reuters)

Along with ending the case against Baazov, Justice Salvatore Mascia of the Quebec Court also stayed the insider trading and market manipulation charges against Yoel Altman and Benjamin Ahdoot, as well as three companies that were controlled by Altman.

Third Time’s The Charm

The decision came after a third request for a stay in the case from lawyers representing Baazov. The first stay was related to delays in getting the case to trial, while the second came after issues related to how the Autorite des marches financiers (AMF) was sharing documents with the defense.

The first two requests were denied, but the judge had warned AMF that he expected them to do a better job of managing their case in the future.

Instead, the situation only got worse. In the latest disclosure issue, the AMF accidentally shared more than 300,000 documents with the defense team that were meant to remain confidential. One they realized the error, the AMF asked Baazov’s lawyers to return the documents and pretend that they had never seen the material. Defense lawyers argued that this would be impossible, with one saying that the AMF was asking her “to quarantine my brain.”

“The defense doesn’t expect the right to a perfect trial, but rather, the right to a fair trial,” lawyer Sophie Melchers said last month. “There comes a point where enough is enough.”

Justice Mascia apparently agreed. Over the course of two hours on Wednesday afternoon, Mascia read his decision, saying that while errors could happen in good faith, “there are limits” to what he could allow the AMF to get away with.

AMF May Appeal Ruling

Prosecutors vowed that they would consider their options in the wake of the decision.

“We are obviously very disappointed with the judge’s decision,” the AMF said in a statement. “We are going to analyze the judgement very closely as well as assessing the pertinence of filing an appeal.”

Baazov and his associates had pleaded not guilty to a variety of counts, including attempting to influence the price of Amaya’s stock. The AMF alleges that the defendants tried to inflate the stock price of Amaya – now known as The Stars Group – in the run-up to the company’s 2014 purchase of PokerStars. Amaya would end up acquiring PokerStars in June for $4.9 billion.

Baazov and the other defendants were charged in 2016. A number of delays led the defense to question whether the case was proceeding in a timely enough fashion, and the trial only began six weeks ago. It had been expected to continue through the fall.

While the dismissal is great news for Baazov, he might not be entirely off the hook just yet. There’s still a separate AMF investigation into other aspects of Baazov’s time as CEO of Amaya that remains ongoing and could result in charges being filed against him.