The nature of Josh Baazov’s connection to Amaya Gaming is likely to be central in the AMF’s insider trading case.
The insider trading scandal involving Amaya Inc. founder and CEO David Baazov appears to focus heavily on Baazov’s older brother, Josh. The elder Baazov brother was one of 13 people who were part of a freeze-and-cease-trade orders, in separate court orders by the AMF.
Josh Baazov and the other 12 individuals had search warrants served, so their paper files and digital data are going to be confiscated as evidence in any trial. All 13 are barred from trading publicly on the Toronto Stock Exchange.
AMF Charged David Baazov
The orders give the AMF, a Quebec province trading regulator, to freeze bank accounts and seize tangible assets. All thirteen people are accused of trading with privileged information between 2011 and 2016. According to police, the illegal trading likely netted them $1.5 million to $1.6 million in profits.
The dates are significant, because the indicate that the group traded illegally long before the Rational Media Group acquistion in the summer of 2014. It was assumed by many that Amaya’s $4.9 billion purchase of Rational Media, which owns PokerStars and FullTilt Poker, was the reason for the insider trading.
Years of Insider Trading
Now, it appears that the alleged insider trading may have been the culmination of years of illegal activity by Josh Baazov and colleagues. Amaya began its rise to prominence in 2011 with its purchase of the gaming software company, Chartwell. Later, Amaya bought the Canadian-Irish online software company, Cryptologic.
The official charges mention insider trading on seven different gaming companies: Amaya, Chartwell Technology, Cryptologic, WMS Industries, Bwin, Intertain Group, and Oldford Group. If the charges against Josh Baazov and 12 others are proven true, then it might be that David Baazov’s worst infraction was giving his brother access to privileged company information. It is a feasible that David Baazov would speak of impending takeovers — not knowing his brother would misuse the information — and his brother would then make money by trading with privileged information.
Nothing about the case implies that scenario at the moment. David Baazov is charged with 5 crimes, too. Until the AMF presents its information in court, such theories are just speculation.
Josh Baazov’s Past
Josh Baazov apparently has a history of unethical and illegal conduct. In 1997, he was charged by the U.S. Federal Trade Commission for running illegal telemarketing scams.
1997 Telemarketing Case
Canada’s publication, Globe and Mail, reported that the FTC had an operation in the late-1990s called “Project Jackpot”, which was a dragnet to find illegal telemarketers and put a stop to their predatory behavior. Josh Baazov was one of the people arrested in those investigations.
Eventually, a judge ordered a “Josh Baazov and Ofer Baazov”, who were thought to be two different people (but were not), to pay $770,000 in restitution to the telemarketing company’s victims. Globe and Mail also reports that none of that money was ever repaid to the victims.
Amaya Gaming Releases Statement
At the heart of the case is likely to be Josh Baazov’s connection to Amaya Gaming. The software company released a statement disclaiming any official connection between Amaya and Josh Baazov.
The statement read, “To the best of the company’s knowledge, [Josh Baazov] is not, and never has been, an Amaya shareholder.”
That is the official line, but unofficial sources claim otherwise. Albert Jan, who worked with David Baazov from 2004 to 2006 on a Montreal-based tanning salon called “Celebrity Tan”, posted on a social media site that Josh Baazov was a co-founder of Amaya Gaming.
Old Press Releases Tell a Different Story
Globe and Mail also found Josh Baazov mentioned in Amaya press releases, at least as late as November 2012. In 2005 and 2006, he was discussed meeting with Canadian officials to discuss PokerMate, which became Amaya’s signature product in the early years.
In 2011, the Chilean government said Josh Baazov was one of two company officials its representatives received a presentation on Amaya products from. A November 2012 edition of Listin Diaro, a Dominican Republic online publication, mentioned that Josh Baazov and Craig Levett met with government officials to discuss Amaya products.
Craig Levett’s Connection
Craig Levett is said to be a longtime business partner of the Baazov Brothers. Levett also was one of the 13 people whose Toronto Stock Exchange trading privileges were frozen.
