A Reasonable Counterpoint in the Amaya Investigation

Alex Weldon : June 18th, 2015

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This Monday, I posted an article regarding the ongoing investigation of Amaya by Quebec’s financial authority, and drawing a parallel with investigations of cheating within the poker world itself. The information for this article was gleaned largely from two sources – Amaya’s own press release regarding the acquisition of Oldman Group, and a series of articles in the Globe & Mail regarding the investigation.

Although the Globe & Mail articles maintain some semblance of balance – mentioning, for instance, Amaya’s internal investigation, which showed no evidence of wrongdoing – they do omit some key facts in Amaya’s favor which were brought to light in an article by Chris Grove, a prominent advocate of regulated online gambling.

Grove’s article, which is well worth the read, raises several points to suggest that perhaps the uptick in advance of the acquisition announcement has been overstated, and that there is a plausible narrative for how it could have happened without any illegal sharing of information.

Some of Grove’s arguments are more compelling than others, but to my mind, the most solid piece of evidence against the insider trading allegations is that on May 15, just prior to the steepest part of the upswing, Amaya announced that it would be allowing lenders to purchase new shares in the company at $15 apiece. Since the stock was trading at around $8 at that time, the fact that the new shares were being issued at nearly twice the price could reasonably have been interpreted by attentive traders as a signal that the company expected its shares to rise in the near future. Could that have been the impetus for the sudden jump in share price and trading volume? Sure.

But in a way, this is exactly what I was talking about in the previous article: unprovability is a two-edged sword, because the twin courts of law and of public opinion have a tendency to place the burden of proof on opposite sides.

In my opinion, whether or not anyone within Amaya, Canaccord or Manulife did anything technically illegal is beside the point, because in all likelihood we’ll never know. There is enough circumstantial evidence to create reasonable suspicion – enough for the Authorité des marchés financiers to feel an investigation was warranted, at any rate – yet also enough circumstantial evidence to create reasonable doubt.

It’s almost a foregone conclusion, then, that the investigation will eventually fizzle out without proving anything one way or another. So, while one side of the coin is that even if any individual employees have in fact broken the law, they’re unlikely to be caught, the other side is that the company as a whole has already suffered damage to its reputation as a result of the investigation. That damage won’t go away immediately even if the result of the investigation is that no charges are filed, and even if the reality of the situation is that there was no wrongdoing.

This is the fundamental problem I was pointing out in the previous article: whether we’re talking about poker or the stock market, the difficulty in proving anything one way or another poses a significant barrier to public confidence. Unfortunately, that’s a problem which is universal, which affects everyone regardless of guilt or innocence, and for which there is no obvious solution.

Alex Weldon (@benefactumgames) is a freelance writer, game designer and semipro poker player from Montreal, Quebec, Canada.

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