Industry Reports

Quebec Judge May Drop Charges against Ex-Amaya CEO David Baazov Next Week

The trial against former owner and CEO of Amaya, David Baazov, continues with the possibility that he walks out free from the insider trading charges against him. After it became clear that his defence has accidentally received potentially confidential documents, the prosecution demanded that they are to be returned. This prompted Baazov’s lawyers to request a stay of proceedings and the ruling is expected next week.

On Thursday, the gambling mogul’s defence lawyers argued in court that all charges against Baazov and the other co-accused should be stayed on the grounds of violation of rights. Recently, the Autorité des marchés financiers (AMF), Quebec’s securities regulator, has demanded that the 320,000 documents it had sent to Baazov’s lawyers should not be considered an evidence in the trial. According to AMF, sending these was a mistake as the documentation was intended to remain confidential to the defence. Sophie Melchers, one of Baazov’s lawyers, told Judge Salvatore Mascia that they cannot “unscramble the egg”.

According to her, the regulator’s demand is illogical and should not be respected by the court. Moreover, it violates Baazov’s constitutional right to a fair trial, as it comes six weeks after the start of the proceedings. During her argumentation, Melchers used untraditional references to the 1997 Hollywood movie “Men in Black” where Will Smith and Tommy Lee Jones wiped the memories of civilians who had accidentally seen aliens. The AMF is now trying to use a “neuralyzer”, the memory-wiping device from the film, on the defence and make the lawyers pretend they have never seen the “potentially privileged” evidence.

The trial against David Baazov looks into the $4.9 acquisition of PokerStars in 2014, which transformed Amaya, into the largest online poker operator in the world. Today, the company, rebranded to The Stars Group, is indeed one of leading gambling giants with operations in multiple markets around the world. Baazov is charged with influencing the market price of Amaya’s securities right before the deal and communicating privileged information in order to profit from the acquisition.

Little Chance for Dismissing the Case

Although the defence argues that taking back the documents at this stage of the trial violates Baazov and the other co-accused constitutional rights, the charges are not likely to be stayed, at least not so easily. Quebec court judge Salvatore Mascia has already rejected two motions for staying of the proceedings, with the second one claiming the AMF has disclosed millions of documents. The lawyers then said that it would be impossible for them to review them all in the little time they were given.

In the latest motion, they argue that they should have access to a small portion of the evidence (the 320,000 documents in question) already sent to them, even if it was done by mistake. AMF’s lawyer, Geneviève Régnier, however, responded that these documents are not so important and not all of them may even be related to the trial. They were confiscated from the offices of several witnesses, Régnier explained, so many of them are probably irrelevant in the charges against Baazov and the other co-accused.

On Friday, Judge Mascia will hear a separate motion filed by the defence, while next week, he said he should be ready to issue his ruling on the request for a stay of proceedings.