No evidence of any violation of securities regulations, claims Amaya

Amaya has maintained that it has found no evidence of any violation of Canadian securities laws or regulations by any of its executive directors or employees, as the Quebec securities regulator continues to investigate trading in the company’s shares in the run-up to its acquisition of PokerStars owner Oldford Group last year.

In its first statement on the matter since the investigation first came to light in mid-December, Amaya said that the investigation by Quebec’s Autorité des marches financiers (AMF) had not resulted in any proceedings and that no charges had yet been filed.

The statement was made in response to a Quebec court’s decision to lift the publication ban on the redacted warrant and supporting affidavit for the search of various entities, including Amaya, related to the AMF’s investigation into trading in Amaya shares ahead of its US$4.9bn acquisition of Oldford Group.

According to sources, the AMF has been granted access to various computer memory cards, data keys and other storage devices used by three Amaya employees, whose names were redacted.

The investigation into Amaya and its associates, including investment bank Canaccord Genuity and insurance firm Manulife Financial, follows significant movement in Amaya’s share price in the run-up to its acquisition of Oldford Group and after. Its shares nearly doubled ahead of the June confirmation of the deal, and continued to increase after the announcement.

“We have thoroughly reviewed the relevant internal activities around its acquisition of Oldford Group and have found no evidence of any violation of Canadian securities laws or regulations including tipping and insider trading by CEO David Baazov and CFO Daniel Sebag,” said Ben Soave, a member of Amaya’s compliance committee and a retired chief superintendent of the RCMP.

“Additionally, the company has not been provided with any evidence that any executives, directors, or employees violated any securities laws or regulations,” he added.

Amaya said that the release of the redacted documents “presents nothing new” having already received the affidavit and reviewed its limited contents. It said that it will wait to see the unredacted documents, but does not believe that there is any reasonable basis for legal action against Amaya or its employees.

A court ordered seal remains in place related to details of the warrant and the redacted contents of the affidavit.

Amaya said that it has provided the AMF with a large amount of information that arose in the period from May 15th to the announcement of the deal which it believed would explain the share price rise.

It said that as the Oldford Group transaction was of “significant magnitude and scale” a long list of bodies such as government agencies, justice officials, gaming regulators, the stock exchange, banks, funds, law firms and consultants, had to be apprised of the transaction before its announcement.

Amaya also provided the regulator with published analyst notes that highlighted the company’s history of acquisitions and anticipated that it was looking to pursue a “transformative acquisition.” One even speculated that the company was looking to acquire a poker business to replace Ongame, which had recently been put up for sale.

This was further fuelled by media speculation and posts on a stock chatroom, which made Amaya anticipate an investigation, since when it says it has cooperated fully with regulators.

“The company is confident that at the end of the investigation the AMF will come to the same conclusion as Amaya has - that if there were violations of Canadian securities laws, they were not committed by the company, officers or directors,” Amaya explained.

Shares in Amaya Inc (Co.Data) (TSX:AYA) closed down 2 per cent at CAD$31.32 per share in Toronto yesterday.