Amaya Inc. has confirmed that its top two executives are among staff at the online gambling company being investigated by Quebec's securities regulator as part of a probe into trading in the Montreal business's stock ahead of a $4.9-billion takeover last summer.
"The investigation involves employees of Amaya, including David Baazov, chief executive officer of the corporation, and Daniel Sebag, chief financial officer of the corporation (but not involving any personal trading by such individuals)," the company said in a news release Monday.
The announcement confirms an April 8 Globe and Mail report, based on information from unidentified sources, that Mr. Baazov and Mr. Sebag were part of the investigation by the Autorité des marchés financiers (AMF).
Amaya said on Monday that the AMF authorized it to make the disclosure.
Further, in a statement that Amaya said the AMF "has not in any way endorsed," Ben Soave, a member of Amaya's compliance committee and an adviser to the board of directors, said "the AMF has neither threatened nor initiated any legal proceedings against the corporation or its employees. Amaya has also not been provided with any evidence that any officers, directors, or other employees violated any securities laws or regulations."
An internal review, supervised by the independent board members with the help of outside legal counsel, conducted a thorough review of internal activities related to Amaya's acquisition of PokerStars and found no evidence of any violations of Canadian securities laws or regulations, said Mr. Soave, a retired RCMP superintendent.
"I believe that any concerns that I or other Amaya officers or directors violated any Canadian securities laws are unfounded and we are confident that at the end of its investigation, the AMF will come to the same conclusion," Mr. Baazov said in a statement.
The targeted Amaya officials are part of a large circle of company associates, advisers and independent fund managers, brokers and investors who have come under regulatory scrutiny after a sharp runup in Amaya's stock in the months ahead of the small online gambling company's announcement of the ambitious takeover of PokerStars.
The value of Amaya's stock nearly doubled in price in heavy trading in advance of the news in June, 2014, and doubled again to more than $30 a share after the news.
Other regulatory groups besides the AMF, in Britain, Canada and the U.S., are examining unusually active trading in Amaya's stock. The AMF is the lead regulator because Amaya is based in Montreal.
The AMF has executed search warrants on three companies: Amaya, its lead financial adviser, Canaccord Genuity Corp., and the Dorval, Que., branch of Manulife Securities Inc.
"The investigation reveals that certain individuals in possession of privileged information transmitted that information to several people. These people then took advantage of that information and traded on Amaya shares," the AMF said in its affidavit for the search warrant.
With files from reporters Jacquie McNish and Nicolas Van Praet