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The Ontario Securities Commission has found that five men committed insider trading, but two others did not, in a case involving multiple stock trades prior to two acquisitions by Amaya Gaming Group Inc. in 2014.

In a 2-1 decision by an OSC hearing panel, newly appointed OSC chair Heather Zordel provided a dissenting opinion that argued all of the accused should be cleared and said OSC staff failed to prove that any insider trading occurred at all.

The decision was released Friday by the Capital Markets Tribunal, a new adjudication arm of the OSC that launched earlier this year. The Amaya case, however, was heard by a panel of OSC commissioners under the old hearing system.

OSC enforcement staff alleged that Majd 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.

OSC staff said Mr. Kitmitto told his officemate Steven Vannatta, his friend and roommate, Christopher Candusso, and Donald Alexander (Sandy) 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.

OSC staff also alleged Mr. Goss tipped off his client, John Fielding, and his assistant Frank Fakhry. And OSC staff alleged Christopher Candusso told his father, Claudio Candusso. All three of those men bought Amaya stock, the OSC alleged.

In its majority decision, the OSC panel found that Mr. Kitmitto had tipped off the three men, and that Mr. Vannatta, Christopher Candusso, Mr. Goss and Mr. Fakhry had traded on inside information. They also found that Mr. Vannatta, Mr. Goss and Mr. Fakhry had tipped off other investors.

But the panel found that OSC staff had failed to prove that Christopher Candusso tipped off his father, or that Claudio Candusso’s trades in Amaya stock were based on material, non-public information. The panel also decided OSC staff had failed to prove that Mr. Fielding traded Amaya shares while in possession of material, non-public information.

Lawyers for most of the accused could not be reached for comment late Friday.

Frank Addario, a lawyer for Mr. Fielding, said “the allegation was upsetting to him because it was an attack on his honesty. Even though the hearing was a tough ordeal, the decision is a complete vindication of his integrity.”

Alistair Crawley, a lawyer for Christopher Candusso, pointed to Ms. Zordel’s opinion. He called dissents “uncommon.”

“We will be appealing the majority decision on behalf of Christopher Candusso,” he said.

In her dissent, Ms. Zordel said she found that “multiple inferences can be drawn from the mosaic of circumstantial evidence” presented by staff. She then cited case law, saying that “if the circumstantial evidence equally supports two opposing inferences, one in favour of staff and one in favour of a respondent, staff will not have met its burden of proof.”

Ms. Zordel said that on April 29, 2014, when Mr. Kitmitto attended a meeting with Amaya’s CEO and signed a non-disclosure agreement, “there was still uncertainty with respect to the deal … Because of this uncertainty, and the fact there were many conditions yet to be fulfilled and different sources of financing transactions that needed to be completed, and because there was the possibility that parties could walk away given there was no signed agreement for the deal and no shareholder voting support agreements, I find that this did not yet constitute” material non-public information.

“Since I found that Kitmitto never received material information, it therefore follows that if he was not in possession of material information … he could not have tipped Vannatta, Christopher and Goss with such information.”

Ms. Zordel also wrote a dissenting opinion in another case, published in April, that found only one of the three principals of the Paramount group, which sold pooled mortgage products until it was shut down in 2017, defrauded investors. Two of the three OSC panelists adjudicating the case said the three men, as well as several Paramount companies, had committed fraud under the securities act.

According to research by OSC staff in response to a Globe and Mail query, Ms. Zordel’s dissenting opinion in Paramount was only the second to have been issued in an adjudication panel decision over the past 10 years. Friday’s decision gives her two of the three in the past decade.

The decision Friday is one of three Amaya-linked insider-trading cases. (Amaya was later known as The Stars Group, which has since been acquired.)

In February 2019, the OSC dismissed its case against CIBC 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 industries for periods ranging from two to six years.

In June 2019, Quebec’s securities regulator, the Autorité des marchés financiers (AMF), ended its five-year inquiry into Amaya stock trading without having won 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.

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