Amaya founder and former CEO David Baazov has filed a motion to dismiss the insider-trading case against him, claiming that Quebec’s securities regulator has done such a poor job of managing its prosecution of the case that his trial cannot take place in a reasonable amount of time.
According to a report in The Globe and Mail, Baazov and five other defendants filed a motion to stay the proceedings back on October 17. It alleges that the Autorité des marchés financiers (AMF) failed to follow a plan designed to minimize delays in the proceedings, and didn’t do the proper investigative work before charging the defendants.
“The case is a textbook example of a penal proceeding that was instituted precipitously, before the investigation was sufficiently advanced and without a significant amount of relevant evidence being gathered, much less analyzed,” wrote attorney Sophie Melchers.
‘Project Bronze’ Data Dump Requires Time to Investigate, Defense Says
One of the major issues cited by Melchers was 16 million items of data that were only released to the defense team on September 21. Those files are related to an investigation by the AMF known as “Project Bronze,” which looked at a dozen people including Josh Baazov, David’s brother. The AMF alleges that the investigated individuals operated a kickback scheme in exchange for insider information, though no charges have been filed.
Melchers says that the defense needs a minimum of six months to analyze the 3.7 terabytes of information included in the Project Bronze document dump. That would require pushing back the start of Baazov’s trial, which is currently scheduled to begin on December 11 in the Court of Quebec.
Delays Push Case Well Beyond Supreme Court Guidelines
That would push back a trial that was already expected to end in April 2018, with a verdict likely to come in July. That would put the end of the case at 28 months after charges were filed. If the delays sought by the defense were granted, the case would end an estimated 37 months after the charges were laid out.
In either case, that’s well beyond the 18-month time frame set out for provincial court cases in a recent Supreme Court ruling. The new test doesn’t apply when delays are caused by the defense, but in other cases, prosecutors must prove that the delays were caused by exceptional circumstances.
“The length of the delays in this case result neither from the defendants’ conduct nor the institutional delays in the district of Montreal but directly from the AMF’s actions and sloppiness,” the motion reads.
Baazov has been charged with five counts of securities fraud. The charges followed a 15-month investigation by the AMF into suspicious trading of Amaya (now The Stars Group) stock before the company announced it was acquiring PokerStars for $4.9 billion in June 2014.
Baazov, who once was the sole owner of Amaya, has since reduced his stake in the company to just 3.8 percent, and resigned his executive positions at the company following the insider trading allegations.
This is not the only legal issue currently facing Baazov. In September, Dubai investment company KBC Aldini Capital Ltd. accused him of fraud, saying that CEO Kalani Lal’s name and signature were used fraudulently as part of a proposal by Baazov to take Amaya private in early 2016.