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The Ontario Securities Commission has reached a settlement agreement with former star Bay Street money manager Ben Cheng, following allegations that he broke securities laws by leaking confidential information about a multibillion-dollar takeover deal involving online gambling company Amaya Inc.

Settlement terms have not been made public, but will be disclosed if the agreement is accepted by an OSC panel at a hearing on Friday.

The proposed civil settlement with Mr. Cheng comes a week after a Quebec judge threw out a quasi-criminal case alleging illegal insider trading around the same transaction against David Baazov, Amaya’s founder and former chief executive officer. The development came after a series of procedural blunders by Quebec’s securities regulator, the Autorité des marchés financiers (AMF), which had brought the allegations against Mr. Baazov.

Last year, the OSC alleged that in 2014, when Mr. Cheng was co-chief investment officer of Aston Hill Asset Management Inc., he learned about the US$4.9-billion takeover by Amaya of the owner of PokerStars before it was announced. He shared the details with a co-worker, John David Rothstein, who traded on the information. The OSC also alleged that Mr. Cheng attempted to cover up his transgressions when confronted by the regulator. The original OSC allegations against Mr. Cheng also included three other respondents, including Mr. Rothstein and well-known executive Eric Tremblay.

Mr. Cheng’s counsel Shara Roy, a partner with Lenczner Slaght, did not immediately respond to a request for comment.

Soon after the OSC’s statement of allegations was made public, Mr. Rothstein, former national sales manager with Aston Hill, settled with the regulator and admitted he traded in Amaya shares on insider information provided by Mr. Cheng. He also admitted that he tipped a client of the firm about the deal. Mr. Rothstein was subsequently fined $11,000 by the OSC and temporarily banned from working at a senior level in the fund industry.

With files from Nicolas Van Praet

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