After having charges for financial malfeasance dismissed against him, former Amaya Gaming Chief Executive Officer David Baazov is now striking back. His first target? The very organization that brought the original charges against him in Canada that forced him out of the largest gaming company in the world.
Baazov Targets AMF
In a Quebec court last week, Baazov’s attorneys filed a lawsuit against the L’Autorite des Marches Financiers, otherwise known as the AMF in Canada. This is one of the key regulators in the nation regarding financial dealings, comparable to what the Securities and Exchange Commission in the States of America does. In filing the suit, Baazov alleges that the AMF was “slanderous” in their actions against him and is seeking roughly $2 million in damages.
The Baazov lawsuit is a direct result of the five counts that were brought against Baazov by the AMF from his actions regarding the merger of the then-known as Amaya Gaming and the online poker giant PokerStars. Those five charges, including influencing or attempting to influence the market price of Amaya stocks, were being litigated in Judge Salvatore Masci’s court in Quebec. That trial ended last June when, in a stunning move, Masci stayed the proceedings.
This is an interesting process that may never see Baazov nor his fellow defendants prosecuted. According to Canadian law, a stay is issued when there has been an “abuse of process” that “violates the principles of fundamental justice.” The results of a stay in the Canadian courts means that “charges that are stayed may never be prosecuted” because of the legal misbehavior. It is under this process that Baazov is most likely filing his lawsuit and, should he win the case, he has stated he would donate the $2 million to five different charities in Canada (Baazov himself is worth approximately $2.2 billion).
The AMF is not commenting on the lawsuit from Baazov, although AMF spokesman Sylvain Theberge did state to the Toronto Star that the lawsuit was “unfounded” and that there were plans to “vigorously” defend their actions.
How the Mighty Have Fallen…
Just five years ago, Baazov was the king of the online gaming and poker world. As the Chief Executive Officer of Amaya Gaming, he negotiated the sale of the online poker behemoth PokerStars to the company. That $4.9 billion deal was the largest in the history of online gaming and immediately made Amaya Gaming the leader in the industry, passing other stalwarts such as bwin.party (the previous largest gaming company) and 888 Holdings.
But with that massive sale came massive attention from stock regulators in Canada. In December 2014, the Royal Canadian Mounted Police (RCMP) and the AMF conducted raids of the Amaya Gaming offices. The raids also covered the companies that worked with Amaya Gaming to come up with the money for the PokerStars purchase, Manulife Financial Corporation and Canaccord Genuity Group.
The AMF, once it reviewed the information from the raids, brought charges against Baazov and fellow businessmen Yoel Altma and Benjamin Ahdoot. Those charges stemmed from the rapid rise in Amaya stock prior to the 2014 merger between PokerStars and Amaya, which the AMF stated at the time that Baazov and his cohorts took advantage of by making stock purchases. The resulting charges forced Baazov from the gaming industry; after a brief dalliance with buying Amaya back and taking it private once again, Baazov instead sold his stock in the company (approximately 17% at one time) and left the business.
Amaya Gaming, since that time, has morphed into The Stars Group. Still maintaining its place as the biggest company in online gaming, the stock in the company has waffled greatly over the past five years. Around the time of the sale, Amaya’s stock was trading at around $31 per share. As The Stars Group, the stock price would peak in June 2018 at $37.80 but has since dropped to a closing price on Friday of $17.51.
Without knowing exactly the malfeasance that the legal team allegedly committed in the trying of the Baazov case, it is difficult to ascertain whether Baazov has a claim for his own lawsuit against the AMF. It could be, as is typical of legal issues, several years before everything is resolved in this case.