Amaya Inc. is severing all ties with David Baazov, its founder and former chief executive officer, roughly five months after he was charged by Quebec's securities regulator with illegal insider trading.
The exit of Mr. Baazov, who had built Amaya into a multibillion-dollar online gambling juggernaut, came a little more than two years after the company announced its $4.9-billion (U.S.) acquisition of the owner of PokerStars – a deal that subsequently became steeped in controversy.
Amaya, based in Pointe-Claire, Que., announced on Friday that Mr. Baazov had resigned, but it gave no specific reason for his departure. "That was his decision and we cannot comment on his behalf," Eric Hollreiser, a company spokesman, said in an e-mail to The Globe and Mail.
The company announced that Rafi Ashkenazi, who was named as interim CEO in March, is taking over from Mr. Baazov on a permanent basis.
A spokesperson for the Autorité des marchés financiers (AMF) confirmed to The Globe earlier this week that its insider trading investigation, which began shortly after Amaya's June, 2014, acquisition of PokerStars was announced, is ongoing. The probe into the deal is the biggest in Canadian history.
In late March, Mr. Baazov went on an indefinite paid leave of absence after charges were brought against him under the Quebec Securities Act. He is facing five charges, including allegedly aiding with trades while in possession of privileged information, influencing the price of Amaya's shares and passing on privileged information.
Charges were also brought against Benjamin Ahdoot, a childhood friend of Mr. Baazov's, and Yoel Altman, a former financial adviser to Amaya.
None of the allegations has been proved in court. If convicted, offenders face possible prison time and stiff fines.
"Mr. Baazov reiterates that he is co-operating with the AMF investigation and will continue to vigorously defend himself," Riyaz Lalani, a spokesman for Mr. Baazov, said in an e-mail to The Globe on Friday. "[Mr. Baazov] looks forward to being exonerated."
Barring a settlement, Mr. Baazov is expected to be tried in a Quebec court in public proceedings. Had he not resigned, the spectacle of a serving executive defending himself against charges in connection with insider trading in shares of his own company would have been a rarity in Canada.
A Toronto securities lawyer said Mr. Baazov's resignation will help Amaya repair its public image, as it will now be able to slowly distance itself from the allegations. "It starts the company on a road to move beyond the allegations," the lawyer said. "The company can start to try to move on."
As The Globe and Mail reported, that regulator's investigation centres on three avenues: the conduct of executives at Amaya, certain individuals at Canaccord Genuity Group Inc., which acted as an investment banker and share distributor for Amaya at the time of the PokerStars transaction, and a number of brokers at Manulife Securities. No charges have been brought against anyone at Canaccord or Manulife and no specific allegations have made against either company.
"We remain consistent on our response that we have conducted a thorough internal investigation and remain confident that all employees of Canaccord Genuity have acted in good faith and with high integrity," Dan Daviau, CEO of Canaccord, wrote in an e-mail to The Globe on Friday.
A Manulife spokesman said the company had no comment.