Ontario regulators have handed down financial penalties and market bans for five men who committed illegal insider trading involving multiple stock trades prior to two acquisitions by Amaya Gaming Group Inc. in 2014.
The Capital Markets Tribunal, the adjudication arm of the Ontario Securities Commission, is prohibiting Steven Vannatta and Alexander (Sandy) Goss from trading in most securities for 15 years, while Majd Kitmitto and Frank Fakhry have received 10-year bans. Christopher Candusso received a three-year ban.
Combined, the five men will pay $2.95-million in penalties, return $1.44-million in profits, and pay costs of $735,375. Of that, Mr. Goss is responsible for a $1-million penalty, $1,228,509 in profits and $183,844 in costs.
OSC staff had asked the panel to fine the five men a total of $4.65-million and impose lifetime bans on Mr. Vannatta, Mr. Goss and Mr. Fakhry. Staff asked for a 15-year ban for Mr. Kitmitto.
In a majority decision in May, the OSC panel found Mr. Kitmitto, then a senior analyst at investment firm Aston Hill Asset Management, was contacted by Canaccord Genuity Group in 2014 to see whether Aston Hill wanted to participate in Amaya’s acquisition of two companies.
The OSC found Mr. Kitmitto told his office mate Mr. Vannatta, his friend and roommate, Mr. Candusso, and Mr. Goss, an investment adviser at Aston Hill Securities, about the potential transactions. While Mr. Kitmitto did not buy any shares, the OSC said, the three other men traded Amaya stock on the material, non-public information.
The OSC found Mr. Goss made recommendations to 15 of his clients to purchase shares of Amaya. He also told his assistant Mr. Fakhry, who tipped two people and made recommendations to five clients. Those two men bought Amaya stock, the OSC alleged.
The decision Monday was one of three Amaya-linked insider-trading cases. (Amaya was later known as Stars Group, which has since been acquired.)
In February, 2019, the OSC dismissed its case against Canadian Imperial Bank of Commerce investment adviser Frank Soave, who had been accused of trading on advance knowledge of Amaya’s impending takeover of PokerStars. The regulator concluded that he did not know the person who gave him a tip was in a position to have inside knowledge.
The decision followed settlements with three other people the regulator had accused of either insider trading or insider tipping on Amaya deals: Ben Cheng, John David Rothstein and Eric Tremblay. They and Mr. Soave all had ties to Aston Hill. Mr. Cheng, Mr. Rothstein and Mr. Tremblay settled their cases for $400,000, $11,000 and $135,000, respectively, and accepted bans from working at a senior level in the Canadian securities industry for periods ranging from two to six years.
In June, 2019, Quebec’s securities regulator, the Autorité des marchés financiers, or AMF, ended its five-year inquiry into Amaya stock trading without sanctions against anyone involved.
That happened one year after a Quebec judge stayed insider-trading charges against David Baazov, Amaya’s former chief executive officer, and two other men in the same case, saying the AMF had shown a “lack of rigour” and had been lax in prosecuting the file. Mr. Baazov then launched a $2-million lawsuit against the regulator in which he alleged the AMF had been malicious in filing accusations against him.
David Milstead