The Quebec Superior Court has ordered Amaya, Inc., owner of the PokerStars online gaming empire, to disclose information on liability insurance policies issued to the company’s senior directors and officers, to frame the company’s liability for damages in a shareholder class-action lawsuit.
The class-action suit is related to alleged insider trading by then-Amaya CEO David Baazov prior to the company’s acquisition of PokerStars.
The court ordered the company to disclose its insurance policies to Pierre Derome and Jacques Lemelin, representative plaintiffs in the shareholders’ class-action lawsuit. On July 22, 2016, Derome and Lemelin filed “a re-amended motion for authorization of a class action and for authorization to bring an action pursuant to Quebec securities law” in the Quebec court, Amaya stated in its management discussion and analysis released this past November.
Amaya must disclose to the plaintiffs “the names and copies of their general liability, errors and omissions, as well as any directors’ and officers’ liability insurance policies that they may have in force relating to this case,” Justice Babak Barin ordered in his ruling released Jan. 13. “The early disclosure of that information may provide the parties with an opportunity to make informed, sensible and pragmatic decisions concerning the conduct of the proceedings, including perhaps the possibility of amicably resolving the matter in question.”
Baazov is facing five charges involving insider trading. He was replaced as CEO by Rafael Ashkenazi.
The class-action lawsuit, Derome v. Amaya, was made under a provision in the Quebec Securities Act that lets shareholders sue for misrepresentation in the secondary market. Amaya contends the suit is without merit, claiming in court documents that the plaintiffs “allege that throughout the class period the defendants violated certain Canadian securities laws by misrepresenting or failing to disclose (or acquiescing in the same), among other things, that Mr. Baazov was engaged in an insider-trading scheme, in which he provided privileged information to third parties and artificially inflated the price of the corporation’s securities.”
