Amaya Gaming is struggling to get its PokerStars brand licensed in New Jersey and accepted in California, but last week it had bigger problems as its Montreal offices were raided by Canadian federal police, along with officials with the financial regulator, Autorité des Marchés Financiers.
According to Amaya, the raid is in connection with its $4.7 billion purchase of the Rational Group, parent company of PokerStars, the world’s dominant online poker site, which has yet to be introduced in the U.S. Later reports indicated that insider trading is a possible target. Amaya stock trades on the Toronto Stock Exchange and has risen 340 percent over the past year, largely connected to the Rational purchase.
“Yesterday’s operation is part of a AMF investigation on that company. I can’t go further for the moment,” said Sylvain Théberge, a spokesman for Autorité des Marchés Financiers told Forbes magazine.
Also raided were financial companies involved in the PokerStars transaction, Canadian investment bank Canaccord Genuity, and Manulife Financial , a Canadian insurance firm.
Eric Hollreiser, an Amaya spokesman, said the company is cooperating with the investigation. “It is not appropriate for us to provide any further details at this time.”
A spokesman for Canaccord Genuity said “we are cooperating with a routine request for information.” In a statement, a Manulife Financial spokeswoman said: “We are aware of the actions taken yesterday by the AMF and RCMP and are fully cooperating with this investigation.”
Amaya released a second statement later in the day: “(Amaya) and its officers are cooperating with the Financial Markets Authority, the securities regulatory authority in the Province of Quebec, in an investigation with regards to trading activities in Amaya securities surrounding the corporation’s acquisition of Oldford Group in 2014,” the statement read.
“To the company’s knowledge, this does not involve any allegations of wrongdoing by Amaya. Amaya will continue to cooperate, if and as requested, consistent with our practice to always cooperate with regulatory authorities.
“The investigation has had no impact on Amaya’s business operations, employees, or companies.”
Amaya stock declined the day after the raid, falling from C$35.06 per share to C$30.25.
