MONTREAL - The lawyer for the former CEO of online gambling giant Amaya urged a securities tribunal on Thursday to soften its characterization of David Baazov's alleged leading role in the insider information case launched by Quebec's securities regulator.
Sophie Melchers didn't ask the independent body to make any specific changes to its March 2016 order against 12 associates, excluding Baazov, who have been accused of allegedly reaping nearly $1.5 million in profits from trading shares after receiving privileged information.
However, Melchers urged the panel to consider all the information that emerged during the four-day hearing that paint a more complete picture of the case than what she said was presented by L'Autorite des marches financiers.
"It is not necessary, it is not required and to me it is not desirable that the tribunal at this stage — with all that remains to be done — conclude based on incomplete evidence that my client contravened the law," she said.
In its original order freezing bank and trading accounts of a dozen associates, friends and family, the tribunal said Baazov was the main source of the insider information.
But that was before new details emerged during the hearing in which Melchers was able to cross-examine its lead investigator.
In her closing comments, Melchers said the AMF didn't meet its obligation for "full and frank disclosure" of evidence by failing to present the tribunal with details that don't dovetail with its allegations that Baazov headed a pyramid scheme that returned kickbacks from trades about impending Amaya acquisitions.
She accused the AMF of giving the tribunal an incomplete picture by only focusing on contact among the named dozen individuals in the days preceding trades. As brothers and business associates, David and Josh Baazov spoke frequently on many matters, as did others.
Melchers also said the AMF failed to disclose that several of the individuals working under contract for Amaya were subject to confidentiality agreements that prevented them from disclosing information that wasn't known publicly.
Under cross-examination, AMF investigator Xavier Saint-Pierre said he never looked at public information, including market rumours and news releases, that could have explained heavy trading activity and share price fluctuations of traded companies.
He also conceded that the case was circumstantial since the AMF didn't have direct proof of impropriety.
While the AMF continues its investigation, Melchers said it has not identified any instances in which Baazov shared privileged information or received any money. Nor does it know what was said during telephone calls or even whether the two sides even spoke.
She also criticized AMF lawyer Philippe Levasseur for questioning Wednesday why Baazov didn't testify at the hearing to proclaim his innocence.
Melchers says no negative inference should be drawn from Baazov's constitutional right to remain silent and he shouldn't have been criticized in a blatantly sensational way.
Through a spokesman, Baazov has maintained his innocence since the beginning, and said he didn't facilitate illegal trades or receive any money from trades.
Ian Robertson said that the tribunal now has a more complete context and facts, including the lack of direct evidence against him.
"Most importantly, as the AMF investigator stated, there is no direct evidence of privileged information being shared by Mr. Baazov. Furthermore, we demonstrated that the AMF is using selective information to make its case," he wrote in an email.
A tribunal decision is expected to be issued in a few months.