Desjardins Capital Markets has downgraded rating of Amaya Inc AYA to Hold from Buy after Quebec's securities regulator charged the company's CEO David Baazov for insider trading.
Analyst Maher Yaghi said he downgraded the stock, pending further clarity on this issue and its potential impact on the possible bid by the CEO to take the company private.
In a client note, Yaghi said: "While fundamentally the announcement should not directly affect the operations of the company, we believe the expansion of the AMF investigation and moving it to penal proceedings, coupled with the risk of this investigation to possibly increase in scope or to delay or cancel the CEO's intended goal to take the company private, could place significant pressure on the stock over the short to medium term."
Yaghi warned investors to take a more cautious view on the stock as the scale of the AMF (Autorité des Marchés Financiers) investigation could increase over time.
Amaya shares were up 0.6 percent at $11.25.
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