Canadian gambling website operator Amaya Inc`s Chief Executive David Baazov has been charged with insider trading by Quebec`s securities regulator.
The regulator said it had filed charges against Baazov for "aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya" and "communicating privileged information."
Amaya`s U.S.-listed shares fell as much as 27.7 percent to $10.30 in early trading.
The charges come about two months after Amaya said it had received a non-binding proposal from Baazov to take the company private.
"These allegations are false and I intend to vigorously contest these accusations," Baazov said in a statement on Wednesday, adding that he was "highly confident" he would be found innocent.
Amaya said in a statement that it believed the charges were without merit and it expected Baazov to be "fully exonerated" of the charges.
The company said it would continue to cooperate with the regulator and the charges were not expected to have any impact on its operations.
Amaya said it had conducted a review of the allegations against Baazov and found no evidence of any violations of Canadian securities laws.
Baazov said he had no further comment on his bid to take Amaya private, but added that he was committed to working toward closing the deal. Based on Amaya`s basic shares outstanding as of Sept. 30, Baazov`s proposal had valued the company at about C$2.8 billion, or $2.14 billion at the current exchange rate.
The regulator launched an investigation into Baazov and other executives in 2014 for trading in Amaya`s stock ahead of the company`s $4.9 billion takeover of PokerStars owner Rational Group.
It has also charged Benjamin Ahdoot and Yoel Altman, among others. Sylvain Theberge, a spokesman for the regulator, said these people were "in the circle on Amaya."
Amaya said the charges against Baazov involve allegations linked to an employee and a former financial adviser to the company.