Amaya Montreal Headquarters Raided by Securities Regulators

December 12th, 2014 | by Greg Shaun

The Amaya Gaming Group, parent company of PokerStars and Full Tilt, is now being investigated by financial regulators in Quebec for its trading activity. (Image: Ryan Remiorz/The Canadian Press)

Amaya Gaming Group confirmed this week that its Montreal headquarters were raided by Quebec financial regulators seeking information related to its $4.9 billion acquisition of Rational Group in June of 2014.

The PokerStars and Full Tilt owner says the investigation by the federal watchdog organization AMF (AutoritÃ© des MarchÃ©s Financiers) is in response to its trading of securities in order to purchase Rational.

AMF, which regulates financial markets in Quebec, declined to comment on the seizure, other than to say it is part of an official investigation into Amaya’s fiscal activity.

Canada’s version of the US Securities and Exchange Commission (SEC), AMF enforces laws surrounding the regulation of the financial sector, primarily insurance and securities. The Royal Canadian Mounted Police assisted in the swoop.

Full Cooperation

Amaya spokesperson Eric Hollreiser said of the situation, “Amaya is cooperating in an investigation by the AutoritÃ© des MarchÃ©s Financiers, the securities regulatory authority in the Province of Quebec. It is not appropriate for us to provide any further details at this time.”

Amaya clarified and expanded on Hollreiser’s comments on Thursday by releasing an official statement on its company website.

“To the Corporation’s knowledge, this does not involve any allegations of wrongdoing by the Corporation,” the report reads. “Amaya will continue to cooperate, if and as requested, consistent with our practice to always cooperate with regulatory authorities. The Corporation will continue to monitor the investigation if and as it proceeds. The investigation has had no impact on Amaya’s business operations, employees or companies.”

While most poker fans are familiar with Rational, Amaya’s multibillion dollar deal was actually for Oldford Group Limited, the parent company to Rational. AMF’s probe is likely to do with the gaming group’s trading activities in its company shares leading up to and following the purchase of Oldford.

As in the United States, stockholders, corporate executives, employees, and anyone else with insider information are prohibited from acting on that intelligence in purchasing or selling stock. In Canada, instead of a countrywide governing agency like the SEC, each province is responsible for monitoring, regulating, and prosecuting companies within its own region.

Stock Tumbles

Since Amaya’s takeover of Rational, its stock price on the Toronto Stock Exchange (TSE: AYA) has been one of the hottest investments. The world’s largest publicly traded online gaming company has seen shares soar more than 340 percent in 2014, largely the result of speculation and the bringing of PokerStars to its portfolio.

Backed by the credit division of Blackstone Group, a New York private equity investment firm, Amaya received extensive publicity leading up to its historical landing of PokerStars. However, following the news of AMF looking into the company, Amaya shares were sent tumbling on Friday.

By late morning, AYA was down more than 20 percent to fall below $30 per share ($25.95 USD), a far cry from its 52-week high of $39.25 ($33.95 USD).