Amaya sued in U.S. after CEO is charged with insider trading

Thu Mar 31, 2016 8:00pm EDT
 
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NEW YORK, March 31 (Reuters) - Amaya Inc was sued on Thursday by a U.S. investor who accused the Canadian gambling website operator of defrauding shareholders by concealing insider trading conducted by its chief executive.

In a proposed class-action complaint filed in the U.S. District Court in Manhattan, the plaintiff, Harvey Weisman, said Amaya should have revealed trades made by Chief Executive David Baazov, and failed to properly disclose deficiencies in its internal controls.

Weisman, who lives in Maryland, said Amaya's share price was inflated while Baazov's trades were concealed.

His lawsuit seeks to recoup losses for investors who bought Amaya shares between June 8, 2015, and March 23, 2016.

Baazov and Daniel Sebag, Amaya's chief financial officer, were also named as defendants. The Pointe-Claire, Quebec-based company did not immediately respond to requests for comment.

Amaya's shares tumbled last week after Quebec's securities regulator, l'Autorité des Marchés Financiers, charged Baazov with insider trading, stemming from a probe that followed Amaya's 2014 purchase of the owner of PokerStars.

The company's U.S.-listed shares, which trade on the Nasdaq, fell 21.5 percent on March 23, while its Canadian shares fell 20.6 percent that day, Reuters data shows.

Amaya announced on March 29 that Baazov was taking an indefinite paid leave of absence.

It is common for U.S. securities fraud lawsuits to be filed against companies whose share prices tumble after negative news becomes public.

The case is Weisman v Amaya Inc et al, U.S. District Court, Southern District of New York, No. 16-02406. (Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)