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David Baazov attends Amaya's annual general meeting in Montreal on June 22, 2015.Graham Hughes/The Canadian Press

As Toronto’s Stars Group Inc. opens a new chapter in its quest to become a global gambling giant with the US$4.7-billion purchase of Sky Betting and Gaming, the future of the company’s founder and two associates is playing out in a Montreal courtroom.

The trial of David Baazov and his co-accused on charges of insider trading and market manipulation officially got underway Monday morning in a Quebec court after weeks of delays caused by legal wrangling over disclosure.

The case will test whether Quebec’s securities regulator, the Autorité des marchés financiers (AMF), can bring three alleged white-collar criminals to justice in what is believed to be Canada’s biggest insider-trading investigation. The AMF has prosecuted about 15 insider-trading cases over the past five years, winning most of them. But it has struggled early on in this one and been lambasted by the judge overseeing the matter for shoddy work.

The case centres on the improbable takeover by Montreal-based Amaya Inc. – Stars Group’s former incarnation before it changed its name and moved its headquarters to Toronto last year – of popular internet cardroom PokerStars for US$4.9-billion. The deal was made possible with the backing of Wall Street institutional investor Blackstone Group LP.

Trading in Amaya stock was frenzied in the weeks before the deal was announced in June, 2014, amid industry rumours of an impending tie-up between the two companies. The AMF alleges Mr. Baazov, Amaya’s founder and then-chief executive, and two associates, Benjamin Ahdoot and Yoel Altman, conspired to try to pump up the price of Amaya stock in the lead-up to the takeover. It alleges the former CEO provided secret information to both men about the progress of takeover talks and that the recipients acted on the tips and traded in Amaya shares.

“Defendants made direct or indirect trades on Amaya stock when they were in possession of privileged information,” Isabelle Bouvier, lawyer for the AMF, said in her opening statement on Monday. “The court should consider the evidence by putting itself in the shoes of a reasonable investor and in the light of the information that was publicly available at the time in order to come to the only conclusion that makes sense.”

None of the allegations has been proven. The accused have pleaded not guilty.

Lawyers for Mr. Baazov and the other defendants said the court and the AMF have not given them the time necessary to review the millions of pieces of evidence disclosed, and could therefore step up their questioning of witnesses under cross examination. They also berated the regulator for being non-cooperative. “The AMF is going to have to live and die by the decisions they have made to make our lives difficult every step of the way,” McCarthy Tétrault’s Julie-Martine Loranger.

Things have not gone smoothly for the AMF since it laid charges against Mr. Baazov in March, 2016. The regulator released some documents in a related investigation by mistake to the defence and asked for their return. It is also facing a lawsuit by a Montreal rabbi who says the AMF targeted his home in an unlawful raid in that same probe.

In this specific case, complaints by the defence that the AMF was failing in its duty to provide fair and timely disclosure of evidence nearly derailed the trial. In the end, Justice Salvatore Mascia rejected two separate motions to dismiss the case but signalled he will not tolerate any unexpected introduction of evidence. “The AMF has been placed on notice,” the judge said.

Some 50 people are scheduled to give testimony, although it’s unlikely that all will be called. They include representatives from the financiers of the PokerStars deal such as Barclays PLC and Deutsche Bank AG, who are expected to testify on the steps taken to maintain confidentiality.

Mr. Baazov is charged with aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of Amaya securities and communicating privileged information. Mr. Ahdoot, a childhood friend of Mr. Baazov’s, and Mr. Altman, a consultant who advised Amaya on deals, are charged with insider trading and attempting to influence the market price of Amaya securities. Three Ontario companies controlled by Mr. Altman are also charged with similar offences.

Mr. Baazov was not present in person in court on Monday. His lawyer explained he had a meeting outside Montreal that he could not reschedule.

If found guilty, the accused face fines and prison terms. The trial is expected to last into the autumn.

Stars Group announced on Saturday it struck a deal to take over Sky Betting & Gaming from CVC Capital Partners. The cash-and-stock agreement is designed to help Stars speed up its strategy to move more decisively into sports betting and lessen its dependence on its poker business, which is proving to be shaky and stagnant. “The rationale for the transaction and the price paid both seem appropriate,” Desjardins analyst Maher Yaghi said in a note.