David Baazov, the Montreal internet gambling entrepreneur charged with insider trading, finally had his day in court Monday as a legal debate rages over whether the case against the Amaya Inc. founder should be thrown out.
Some 20 months after Quebec's securities regulator laid rare insider trading charges against him in March, 2016, Mr. Baazov appeared for the first scheduled day of what was supposed to be his trial. Instead, it might be the beginning of the dismissal of the case if the judge accepts the defence's arguments to stay the proceedings.
Wearing a form-fitting blue suit and white shirt unbuttoned at the collar, Mr. Baazov looked engaged but relaxed as he chatted in the front row with his co-accused.
His co-accused are Yoel Altman, a Toronto financier; and Benjamin Ahdoot, a childhood friend who was vice-president of government projects at Amaya at the time the offences allegedly occurred.
Interest in the case, believed to be Canada's biggest ever insider-trading investigation, is high, but the room chosen to hear the matter is small. Several people who showed up at room 5.05 at Montreal's courthouse this morning but couldn't find a seat were directed to a spillover room downstairs, allowing them to follow the court drama remotely.
The Autorité des marchés financiers (AMF) accuses Mr. Baazov of 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 and Mr. Altman, a former adviser to Amaya, have been charged with insider trading and attempting to influence the market price of Amaya securities. Three companies controlled by Mr. Altman are also being charged with similar offences.
The AMF alleges the three men conspired to try to pump up the price of Amaya stock in the lead-up to its $4.9-billion (U.S.) takeover of popular internet cardroom PokerStars. It alleges that Mr. Baazov provided privileged information to both men about the progress of takeover talks and that the recipients acted on the tips and traded in Amaya shares.
None of the allegations has been proven. Defendants have maintained they did nothing wrong.
Mr. Baazov and his two co-accused want the case against them dismissed, saying the regulator has fumbled and mismanaged document disclosure so thoroughly that they can't be tried in reasonable time. They've filed a motion to stay the proceedings, which is now being considered by Justice Salvatore Mascia.
Much of the day Monday was spent hearing arguments from both the defence and prosecution as to why a stay should be granted or rejected.
Lawyers for the three men say the AMF dumped 16 million items of data onto their lap in late September and more documents again this past Friday, making it exceedingly difficult to prepare a proper defence. They noted the AMF later advised them that the vast majority of these items were communicated in error.
Defence counsel also said there's still a high degree of uncertainty about how many of the 50 people on the AMF's list of witnesses will testify in the case. Subpoenas are slated to go out starting this week to witnesses in Ontario, the court heard.
Millions of documents are still outstanding that have not been evaluated by the defence, said Dominique Shoofey, lawyer for Mr. Baazov. "We have constitutional rights at stake here," he said.
Under the current timelines set out for Mr. Baazov's trial, it is anticipated that a verdict would be rendered by the end of July, 2018. That works out to 28 months after charges were laid, a time frame that vastly exceeds the 18-month, start-to-finish ceiling for provincial court set out in a recent Supreme Court ruling known as Jordan.
Judges have applied the Jordan decision in different ways and it remains unclear whether Justice Mascia will grant the stay in this case.
A September ruling by the Ontario Court of Appeal unanimously ordered a trial for an Ottawa man on a charge of first-degree murder, overturning a lower-court ruling that dismissed the charge over delay. But a decision by the Quebec Court of Appeal earlier this month threw out the case of a man and his mother found guilty of selling and exporting controlled merchandise, namely military-grade infrared goggles.
Amaya has changed its name to the Stars Group Inc. and relocated its headquarters to Toronto.