Judge tosses Amaya CEO’s insider trading trial

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’Autorité des marchés 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.

The trial has been going on for six weeks and was expected to continue through the fall.

Then on May 15 the regulator emailed the defence to say it had become aware of its mistake in releasing the documents.

“Following certain verifications, the AMF has noted that some of the divulged elements ... are potentially privileged,” read the email, obtained by the CBC.

“As a result, we ask the judge to make an order so that they are also removed from the disclosures.”

The defence accused the AMF of abusive procedure and filed a motion with the court for a stay of proceedings.

In their motion, defence lawyers noted they would no longer have access to the more than 320,000 documents.

“Denying access to the defendants of such evidence in the middle of an ongoing trial violates their fundamental constitutional right,” they argued in the motion as reported by the CBC.

“The repeated errors committed by the AMF in matters wholly within its control (led) to the inevitable conclusion that only a stay of proceedings can put an end to these abusive proceedings.”

It was the defence team’s third attempt to have the case thrown out. In January the judge rejected a motion to have the charges tossed because of the delay in getting them to trial under a Supreme Court of Canada ruling known as Jordan.

He then rejected a defence request over claims that the prosecution wasn’t disclosing evidence in a timely fashion.

Amaya is now known as The Stars Group Inc. and has moved its operations to Toronto.