Poker and the stock market have more than a few things in common; played fairly, both come down to anticipating what others will do, managing risk and reward, and being careful with your bankroll. When it comes to foul play, they also share a common problem: Knowing that someone is cheating is a very different thing than proving it.

Valeriu Coca is still under investigation by World Series of Poker officials following allegations that he cheated in the $10,000 No-Limit Hold’em Heads-Up Championship. The story is a veritable forest of red flags: a known cheater buying into an event far above his usual stakes, behaving weirdly at the table and defeating a series of very strong players, only to lose once subjected to more intense scrutiny. Nevertheless, no one is entirely sure how he did it, and as time passes it appears less and less likely that casino security will find any evidence which would allow them to disqualify him. In all likelihood, he’s going to get away with it.

Meanwhile, PokerStars security teams seem to be making better progress at catching online cheaters, having banned several members of a suspected bot ring. But behind the scenes, several people involved with PokerStars’s owner, Amaya, have themselves been under scrutiny for the past six months. As in the case of Coca, the circumstantial evidence of wrongdoing is pretty strong, but the difficulty of actually proving anything makes it quite likely that the guilty parties will get away scot free.

The Amaya takeover

It was just about this time last year that Amaya acquired Oldford Group, which owns Rational Group, which in turns owns a number of properties including PokerStars and Full Tilt Poker. This news was quite shocking at the time, since Amaya was only valued at $177 million prior to the takeover and its stock had been on the decline just a few months prior, yet the purchase was for a whopping $4.9 billion.

This sort of deal seems unnatural to those of us not deeply involved in finance – like a fish swallowing a whale – but is apparently not unheard of. In order to make the deal happen, Amaya raised $1.7 billion by creating new shares to issue to investors and borrowed the rest from a variety of financial institutions. It was a big deal, involving a lot of people.

Any time that much money is changing hands, moral hazards abound, but the real red flag in all of this is that Amaya’s stock began to surge two months prior to the takeover being announced, trading at over twice its normal volume and nearly tripling in value. There was little going on publicly to explain this sudden interest in the company, unless word had somehow gotten out and people were trying to get on board early before the inevitable leap in value that would follow the announcement.

The investigation

For that reason, it was no surprise when Amaya found itself under investigation back in December by Quebec’s “Authorité des marchés financiers” (Financial Market Authority), or AMF. The company downplayed the investigation at the time, claiming that it was standard practice for any deal of that magnitude, and that they were satisfied by their own internal investigations that there had been no wrongdoing within Amaya.

In April, however, it was revealed that the investigation was not a routine matter after all, but based on reports from two whistleblowers and involves not only Amaya itself, but also its lead financial adviser Canaccord Genuity Corp. and the branch of Manulife Securities Inc. for Dorval, where Amaya is located.

Now, it’s gradually coming out who exactly is under investigation within these organizations. According to the Globe and Mail Metro, these are two top executives and a mid-level manager at Amaya; a senior executive and a broker at Canaccord; and no less than 15 employees at Manulife, including the branch’s most successful broker.

So far, though, no one is talking, and the odds aren’t good that many – or any – of them will face any kind of serious repercussions. The definition of insider trading is quite narrow, and so, like cheating at cards, it’s not enough just to know that something fishy is going on, and who is likely involved. Nor is it enough to show that someone bought or sold stock after being in contact with someone from the company and just prior to a big change in stock price. There needs to be evidence that private information changed hands, that the recipient understood that the information was not publicly available at the time, and that the decision to buy or sell was based on that information. That definition leaves a great deal of leeway for plausible deniability, so long as the parties involved exercised at least a modicum of discretion at the time.

The importance of confidence

One more parallel between poker and investment is the importance of public confidence. In the grand scheme of things, Valeriu Coca is no Russ Hamilton, and Amaya is no JPMorgan. Nonetheless, any time there’s enough circumstantial evidence to convict someone (or some organization) in the court of public opinion, but insufficient hard evidence for the relevant authorities to actually do anything, it’s bad for public confidence, and therefore bad for the entire industry.

To an extent, individual greed can be relied on to keep people coming back to a game that they suspect is rigged, but only for so long. Public confidence in the financial system has been strained since the sub-prime mortgage scandal, as it has been in the poker industry since Black Friday and the Ultimate Bet superuser scandal. It’s not obvious how to restore that confidence, but it is obvious that continued scandals both big and small are not helping matters on either front.

Update: In a follow-up article, we have presented some additional information in Amaya’s favor that is missing from most mainstream reports on the story. Click here to get the other side of the story.

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