09/12/2016 13:30 EDT | Updated 09/13/2017 01:12 EDT

One person to be dropped from allegations of insider trading with Amaya ex-CEO

MONTREAL — Allegations of insider trading are being whittled down to 12 people affiliated with the former CEO of online gaming company Amaya.

The independent tribunal overseeing Quebec's financial sector is expected to endorse the change after a Quebec court rejected an effort to overturn its July decision to remove Nathalie Bensmihan from the list. She is the wife of Craig Levett, an associate of ex-Amaya CEO David Baazov's brother Josh.

"She's going to be out of the proceedings entirely," her lawyer Mark Meland said Monday during a break at the L'Autorite des marches financiers tribunal hearing.

The court rejected the Quebec securities regulator's appeal of the tribunal ruling that found there was no proof to personally implicate her in the alleged illegal activities of her husband, even though some shares were purchased and sold through her trading account.

The tribunal had said Bensmihan shouldn't be considered "guilty by association."

She has agreed not to trade certain shares.

The other individuals have withdrawn their requests to have the tribunal overturn orders that freeze some bank and trading accounts that contain alleged ill-gotten gains, after entering into agreements with AMF.

The 12 individuals are alleged to have used access to privileged information about impending Amaya acquisitions to reap nearly $1.5 million in profit over five years.

AMF investigator Xavier Saint-Pierre launched Monday's hearing by detailing allegations of how several colleagues, friends and family of David Baazov and his brother Josh used tips to earn large profits from buying and then selling shares in takeover targets.

He pointed to emails, texts and phone calls along with detailed trading activity among the parties.

Saint-Pierre referred to a 105-page report in which the AMF alleged that the Baazovs benefited from a kickback scheme in which payments were received in exchange for sharing privileged information.

"Here is what we owe your brother," Craig Levett, an associate of David Baazov's, wrote in a February 2013 email to Josh Baazov, according to the AMF document. "I will have a check for him tomorrow and you, too.''

The document alleges Levett wrote two cheques the next day to Josh Baazov totalling $32,100, which he described as a "gift."

Lawyers for David and Josh Baazov are slated to cross-examine Saint-Pierre on Tuesday. David Baazov spokesman Ian Robertson said his client is "innocent of any wrongdoing."

David Baazov faces criminal charges before the Quebec Court, including influencing or attempting to influence the market price of the securities of Amaya and communicating privileged information. He resigned as CEO last month and cut all ties with the company, though is a major shareholder.

He was charged as part of an investigation by the AMF that resulted in 23 charges against three people and three companies.


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