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Louis Morisset was saving the juiciest details for another day when, in mid-March, the head of Quebec's securities watchdog tabled his agency's annual enforcement report, touting $8.7-million in fines imposed and a dozen insider-trading cases either initiated or completed in 2015.

"We are more determined than ever to ensure that those who violate the laws we administer are sanctioned," the president and chief executive officer of the Autorité des marchés financiers insisted on March 16. "They significantly erode the confidence that is fundamental to effective market operations, and their behaviour will not be tolerated."

Indeed, as he delivered those comments, the 43-year-old Mr. Morisset was already poised to bring charges in Canada's highest-profile insider-trading case in years – launching the biggest test yet of the AMF's enforcement mettle as it seeks to defang proponents of a national securities commission.

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A week earlier, AMF lawyers had gone before Quebec's financial-services tribunal seeking an order to freeze the bank accounts and trading activities of 13 individuals it had been monitoring as part of a months-long investigation involving Amaya Inc., the Montreal-based online gambling firm that had shot to global status with its long-odds $4.9-billion (U.S.) purchase of PokerStars in 2014.

"The investigator affirms that there is an imminent risk that the respondents will continue similar illicit activities," the AMF told the Bureau de décision et de révision at a March 8 hearing seeking the freeze order. "These respondents have – once more – benefited from illegally obtained privileged information concerning Amaya and, in particular, concerning the announcement by the respondent David Baazov of his intention to eventually take the company private."

The March 8 proceedings were kept under wraps until March 23, when the AMF filed 23 charges involving alleged illegal trading in shares of Amaya and/or its takeover targets in recent years. Mr. Baazov, who took a leave of absence as Amaya CEO this week to contest the charges and work on Amaya's privatization, is accused of "aiding in trades while in possession of privileged information."

The AMF identified Mr. Baazov, the brash 35-year-old whose moves to dominate the burgeoning online gambling business have prompted the likes of Forbes magazine to take notice, as the "principal source" of insider information on which friends and associates traded stock and pocketed about $1.5-million in profits. Mr. Baazov, the AMF alleges, often texted his brother to relay insider information that Josh Baazov then passed on to a circle of associates, who acted on the news before it was made public.

For Mr. Morisset, a failure to prove the charges against Mr. Baazov and the others could undermine his crusade to persuade the new Liberal government in Ottawa to abandon its Conservative predecessor's drive to create a national securities commission. Five provinces, including Ontario and British Columbia, have already signed on to the creation of a single Capital Markets Regulatory Authority that would be operated on a joint federal-provincial basis.

Proponents of a national regulator often cite weak market enforcement by provincial watchdogs that are protective of their turf but lack the expertise and resources to go after big-fish financial criminals. Mr. Morisset has striven to debunk those impressions. As chairman of the Canadian Securities Administrators, the umbrella group for the country's securities regulators, Mr. Morisset has championed co-operation among provincial agencies in everything from rule-making to insider-trading investigations, while insisting that "uniformity isn't always what's needed."

It's a juggling act that could be hard to maintain if the case against Mr. Baazov and the others unravels. Insider-trading allegations are notoriously tough to prove and even the fiercest enforcers of market probity, such as Preet Bharara, the U.S. federal attorney who polices Wall Street, have watched their carefully constructed cases collapse in court, or even before they get that far.

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It's no exaggeration to say that the eyes of the entire financial world will be on the AMF as it prepares to argue its case against Mr. Baazov et al. before the Bureau or the Quebec Superior Court. Amaya has a global profile and several other authorities, including the RCMP and Britain's Financial Conduct Authority, have been involved in the Amaya investigation.

If the AMF case falls apart or drags on too long, it would shed an unflattering light on Canada's ability to police its financial markets, reviving a reputation dating back at least to the days when the old Vancouver Stock Exchange was considered a hotbed for junior mining scams.

Much has changed since then. The AMF alone has tripled the size of its enforcement staff in the past decade to about 150. But Mr. Morisset still needs to prove he can a land a big fish.

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