The Ontario Securities Commission has levelled allegations of improper tipping and insider trading in shares of Amaya Inc. (AYA.TO) involving two former executives of Aston Hill Asset Management and a CIBC investment advisor.

The OSC said money managers made thousands of dollars in insider trading profits and then made false or misleading statements to regulators in an effort to conceal their actions.

The allegations relate to Amaya’s US$4-billion deal in 2014 to acquire the Olford Group Ltd., the company that owns and operates online gambling websites PokerStars and Full Tilt Poker. Amaya shares skyrocketed in value after the deal was announced.

The OSC alleges Ben Cheng, who was Aston Hill’s President and Chief Investment Officer at the time, learned details of the upcoming transaction in April of 2014 at a meeting about the proposed transaction. Cheng signed a non-disclosure agreement about the deal.

On June 11, 2014, a day before the deal was to be made public, Cheng emailed John David Rothstein, Aston Hill’s then Sr. VP and National Sales Manager, an invitation to meet in an office boardroom. In that meeting, the OSC alleges Cheng tipped off Rothstein about the pending deal and told him to spread the word among other Aston Hill clients.

“Cheng … suggested to Rothstein to inform others, who had lost money on certain other investments promoted by [Aston Hill], about the acquisition before it was announced,” the OSC said.  “Rothstein understood that the purpose of providing them with the material, undisclosed information was to make up for these losses.”

About two hours after the meeting Rothstein purchased 700 shares of Amaya for himself at $11.875 per share.  He sold two days later at $19.77 per share — pocketing $5,507 in profits, the OSC said.

The afternoon before the deal was announced, Rothstein also texted “AYA,” the Amaya stock market ticker, to Frank Soave, who was first vice-president and Investment Advisor at CIBC Wood Gundy at the time. Moments later, Soave allegedly texted back “Sorry never owned it should I?” Rothstein texted back, “Yes.”

The next morning Rothstein allegedly told Soave about the impending deal. Soave bought 5,000 Amaya shares at $12.10 per share. When the company’s shares were halted less than two hours later Soave texted Rothstein stating: “Wholy Shit (sic).”

Soave realized a trading gain of $98,921 when he sold his Amaya shares for $19.78 just a day later.  Soave texted “thank you” to Rothstein who then texted the reply: “Unbelievable.” Soave had never purchased Amaya shares before, the OSC noted.

The OSC also alleges that Cheng, Soave, and Eric Tremblay, Aston Hill’s CEO and Chairman of the Board at the time, made false or misleading statements to the regulator during the course of its investigation.

Cheng allegedly told colleagues about a confidential meeting he had with OSC investigators in 2016 which gave others the chance to "tailor" their testimony. Cheng also suggested to Rothstein “what Rothstein’s evidence to Staff should be when examined under oath,” the OSC said.

Soave provided “false explanations” for the texts and emails, and Tremblay told investigators that Rothstein bought the Amaya stock “because of information he heard from brokers,” according to the OSC.

In November, Amaya’s founder and former president David Baazov will face a criminal trial on insider trading charges in Quebec. He will stand trial with Benjamin Ahdoot, a childhood friend of Baazov, and Yoel Altman, an adviser to Amaya. The men have been charged with insider trading and attempting to influence the market price of Amaya securities. All three men have pled not guilty in what has become one of the largest insider trading cases in Canadian history

Aston Hill Financial merged with Front Street Capital in 2016. At the time Ben Cheng took a leave of absence from the company he founded with Eric Tremblay in 2007. Tremblay stepped down from the company in 2015.