AMAYA CASE DISMISSED
Evidence flub by AMF
MONTREAL • A Quebec court judge ended one of the largest insider trading cases in Canadian history on Wednesday, granting the defence request to halt the trial of the former CEO of online gaming company Amaya and his co-accused.
Judge Salvatore Mascia agreed to the defence’s motion to stay proceedings against David Baazov after rejecting two prior efforts.
The decision was made in response to the defence’s claim it was inadvertently given about 320,000 privileged documents it shouldn’t have seen.
The prosecution wanted them back.
The documents were among tens of millions of pieces of information collected by Quebec’s securities regulator, l’Autorite des marches financiers (AMF). It charged Baazov, two of his associates and three companies with insider-related counts in 2016.
“We are obviously very disappointed with the judge’s decision,” the regulator said in a statement Wednesday.
“We are going to analyze the judgment very closely as well as assessing the pertinence of filing an appeal.”
The charges stemmed from an investigation into the US$4.9-billion deal to acquire PokerStars in 2014 that transformed the former Montreal firm into the world’s largest public online poker company.
Baazov had pleaded not guilty to five counts, including influencing or attempting to influence the market price of Amaya’s securities.
His associates, Yoel Altman and Benjamin Ahdoot, and three companies faced 18 additional charges stemming from the regulator’s investigation. They had also pleaded not guilty.
Kudlow presented the picture of a president who views tariffs as a cudgel that will force reluctant trading partners to open up their economies.
Problems with Canada will be worked through, he said, as NAFTA talks continue. “The U.S. and Canada will remain firm friends and allies, whatever short-term disagreements they have.”
But no matter how Trump’s latest hired gun tried to portray his leader as a man of “backbone,” taking on a broken world trade system with the simple sword of truth and the trusty shield of fair play, there are growing concerns that his trade policy might have a disastrous impact on the U.S. and global economies.
In its latest global economic prospects report, the World Bank warned that trade tensions could see global trade decline nine per cent, a drop equivalent to the 2008 financial crisis.
Kudlow was unconvincing when asked how the current situation differs from that which saw President George W. Bush impose steel tariffs in 2002. In that case the tariffs were withdrawn 18 months later after adversely affecting GDP and employment in the U.S.
The Americans were, in that instance, on the receiving end of a World Trade Organization decision that ruled an anti-dumping response was inappropriate because imports were actually declining at the time.
That precedent is unlikely to daunt Trump. As Kudlow said, “international multilateral organizations are not going to determine American policy.”
But a drop in U.S. growth or employment might make the president think twice.
Canadian officials say they are already seeing evidence that the U.S. tariffs are having a boomerang effect. One New York State-based company that has plants on both sides of the border has complained about tariffs being imposed on finished goods — costs that are inevitably passed on to U.S. customers.
These unintended consequences are kicking in even before Canada and other countries retaliate against the steel tariffs.
Kudlow couldn’t point to a difference between 2002 and 2018 because there is none. The results will be the same — which Trump must know. In which case, the tariffs and any additional penalties are a ruse, a negotiating ploy to wring concessions from trading partners.
It may be that we are nearing the end game. If Trump takes the NAFTA sunset clause off the table when he meets Trudeau on Saturday morning — the contentious proposal that would automatically end the deal after five years if all three member countries failed to re-approve it — they could reach the bones of a deal.
If he doesn’t, Trudeau should call his bluff.