Amaya Gaming insider trading scandal sparks class action lawsuit in US

The hits just keep on coming for Canadian online gambling operator Amaya Gaming, which is being sued in US federal court over its growing insider trading scandal.

On Thursday, Maryland-based investor Harvey Weisman filed a proposed class action complaint in the US Southern District of New York (SDNY), alleging that Amaya failed to disclose the shenanigans of its embattled CEO David Baazov, who announced this week that he was taking an indefinite leave of absence from the company.

Baazov, along with another Amaya exec and a former financial advisor, were charged with insider trading last week, while 13 other individuals – including Baazov’s older brother Josh – had their trading privileges suspended by the securities regulator in Amaya’s home province of Quebec over sketchy Amaya-related trading activity dating back to 2010.

Weisman says Amaya had a duty to disclose Baazov’s trading activity and also failed to properly disclose deficiencies in its internal controls. Weisman claims that false and/or misleading statements by Amaya execs caused the company’s share price to be artificially inflated before shedding over one-fifth its value following last week’s AMF charges.