Poker Stars .. Raided by the Federal Police

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Provincial Securities Regulators Investigate Amaya And Two Financial Firms

Updated to reflect new Amaya comment.

Federal Canadian police officers and provincial financial markets regulators on Wednesday showed up at the headquarters of Amaya, the Montreal-based owner of PokerStars, and two financial firms, as part of an investigation that Amaya says is related to trading in its securities surrounding its $4.9 billion acquisition of Rational Group earlier this year.

The Royal Canadian Mounted Police and Autorité des Marchés Financiers, which regulates Quebec’s financial markets, showed up at the Montreal area offices of Amaya, Canadian investment bank Canaccord Genuity, and Manulife Financial , a Canadian insurance firm. “Yesterday’s operation is part of a AMF investigation on that company. I can’t go further for the moment,” said Sylvain Théberge, a spokeman for Autorité des Marchés Financiers.

“Amaya is cooperating in an investigation by the Autorité des Marchés financiers (AMF), the securities regulatory authority in the Province of Quebec,” said Eric Hollreiser, an Amaya spokesman, in a statement. “It is not appropriate for us to provide any further details at this time.” A spokesman for Cannaccord Genuity said “we are cooperating with a routine request for information.” In a statement, a Manulife Financial spokeswoman said: “We are aware of the actions taken yesterday by the AMF and RCMP and are fully cooperating with this investigation.”

Amaya and its CEO, David Baazov, were recently the subject of a Forbes Magazine article that called Baazov the new king of online gambling.

Amaya’s stock, which trades on the Toronto Stock Exchange, has been one of the hottest stocks in financial markets this year. Shares of the company have soared by 340% in 2014, largely as a result of a transformative deal that saw Amaya acquire Rational Group, the owner of Pokerstars, the world’s biggest online poker company, in a $4.9 billion deal that was backed by the credit division of Blackstone Group, the world’s biggest private equity firm. Amaya’s deal for Rational Group was initially announced in June. Shares of Amaya started to rise earlier this year in May amid general market speculation that the historically acquisitive company was potentially working on a new deal.




UPDATE: Amaya has expanded on its initial comment, saying that “to the Corporation’s knowledge, this does not involve any allegations of wrongdoing by the Corporation.” The company added that the AMF investigation is focusing on trading activities surrounding Amaya’s Rational Group purchase and that “the investigation has had no impact on Amaya’s business operations, employees or companies.”