Class action filed against Amaya Inc. executives
News on 1 Apr 2016
News on 1 Apr 2016
The already troublesome legal hassles facing Amaya as a result of insider trading charges against its CEO and chairman David Baazov and alleged associates (see previous reports) increased late Thursday as news broke that a class action against Baazov and chief financial officer Daniel Sebag had been filed in the Southern District of New York.
The file Mattie v. Amaya Inc., et al alleges contraventions of US federal securities laws and was originated by one Jason Mattie, an individual who bought 471 Amaya shares in four separate transactions between June 8 2015 and March 22 2016, when the Autorité des marchés financiers (AMF) financial regulator in Quebec announced insider trading charges against Baazov and 16 others.
Baazov has denied any wrongdoing in a response to the AMF charges, but has temporarily stepped away from Amaya to fight the case. The inclusion in the Mattie class action of Amaya’s CFO relates to his position of authority in Amaya, the attendant responsibilities, and his statements on the company business.
Sebag was not named in the AMF charges.
Mattie claims that Baazov and Sebag contravened US federal securities laws by making false and/or misleading statements, and failing to disclose material negative facts regarding Amaya’s business, operations and prospects.
The filing claims that defendants did not disclose that Baazov was involved in insider trading activity; that internal controls within Amaya were inadequate; and that as a consequence false and misleading statements regarding the company were made, and these wrongful acts and omissions resulted in a severe decline in the market value of Amaya securities to the prejudice of Mattie and other class action members.
The Mattie filing was carried out by a New York legal company at the behest of Glancy Prongay & Murray LLP, a California-based law firm which has invited other Amaya investors to join the action. Amaya stock is traded on the US Nasdaq exchange, giving the New York court jurisdiction.
The filings include comprehensive details of both the allegations and historical statements and financial disclosures made by Amaya in an attempt to illustrate that allegedly misleading and fraudulent statements by Baazov and Sebag were knowingly made in efforts to boost the Amaya share price and conceal adverse information.
Trading records are sought in the filing in order to establish the identity of other negatively-impacted Amaya investors.
The class action filing has triggered speculation that the Pokerstars position in California will be weakened as the cardroom and tribal alliance to which it belongs continues to lobby for legalised online poker in the state.
There are also concerns that the recent debut of Pokerstars in the New Jersey legalised online gambling market could be impacted, although the Garden State regulator has thus far intimated only that it is monitoring developments, and has advised that the full Pokerstars licence is still pending (the company is operating on a transactional waiver, but this expires this week and will presumably require renewal).
