Fifty Proof, a horse co-owned by Toronto businessman and horse breeder John Fielding, gallops over the E.P.Taylor turf course at Woodbine Racetrack on Oct. 13, 2010. Mr. Fielding was listed in regulatory filings as an insider to Amaya Inc., which the company subsequently disputed with Quebec’s provincial securities regulator.Michael Burns/handout
When Toronto business man and internationally-known race-horse breeder John Fielding bought millions of dollars worth of shares of online gambling company Amaya Inc. between April 11 and May 14 of 2014, he thought he had all his ducks in a row.
His roughly $2-million investment was turning out to be an extremely savvy bet. Amaya shares, which had been trading around $7 when he first started buying, were appreciating nicely. By early June, the stock was trading in the $11 range. Investors were snapping up shares in the Pointe-Claire, Que.-based company partly because of widespread Bay Street speculation that some sort of deal was in the works.
In an interview, Mr. Fielding said he bought shares in the gambling firm because he "loved the space," and because his broker had put a bug in his ear about the company. He had also heard "all sorts of rumours" that something was going on.
"I thought that it was Amaya that was being bought," he said, guffawing at how little he actually knew.
On June 12, 2014, Amaya, whose market capitalization was under a billion dollars, announced it was buying privately-held Oldford Group, the owner of PokerStars, for a mind-blowing $4.9-billion – largely on the back of a gargantuan $3-billion loan. The next day, shares in Amaya shot up 42 per cent to close at $20. The deal transformed Amaya from a bit player into the biggest publicly-held online gambling company in the world. Amaya's stock continued to move higher in the months following the announcement, closing at an all-time high of $38.74 a share on Nov. 28.
One might assume the avuncular Mr. Fielding, whose day job was running a privately-held manufacturing plant that churns out boatloads of display cabinets for the likes of Sephora and Shoppers Drug Mart, would be ecstatic right? Not exactly.
In May, Mr. Fielding says, he was informed that, as a board member of Intertain Group Ltd., he was considered an "insider" of Amaya, and that as an insider he could be privy to material non-disclosed information and therefore legally obliged to file his trades on the System for Electronic Disclosure by Insiders (SEDI) database. (Mr. Fielding says he cannot recall exactly who told him that he was required to make the filings.)
Intertain, a Toronto-based online gambling company, came into existence in early 2014 because it acquired assets from Amaya. Amaya is also Intertain's biggest shareholder with a 7-per-cent stake, according to Bloomberg data. "Because I was on the board of Interain, I suppose I was an insider," he says. However, Mr. Fielding made it clear that he had very little knowledge of Amaya.
"I'd never met anyone with Amaya," he added. "I don't know anyone at Amaya. I don't know anybody on their board."
Mr. Fielding is also a director with Aston Hill Financial Inc., an asset management company that was a significant shareholder in Amaya before the Oldford Group deal was announced. (Subsequently, Aston Hill has largely sold off its stake).
"I have nothing to do with Aston Hill other than sit on their board. I'm never there [at Aston Hill]. I've attended one board meeting since I've been on the board," he insisted, saying that he attends the others by phone. "I would have no clue that Aston Hill had shares in Amaya."
In mid-May, somewhat reluctantly, Mr. Fielding registered his trades on SEDI as an Amaya insider.
Because Mr. Fielding filed his trades with SEDI more than five days after they occurred, the Aututorité des marchés financiers (AMF), Quebec's securities regulator, slapped him with a $10,300 fine for filing late. Meanwhile, Mr. Fielding said, a lawyer at Amaya Inc. got wind of his SEDI filings and noticed that something was amiss – according to Mr. Fielding, the lawyer told him that he was not, in fact, an Amaya insider.
According to a document Mr. Fielding presented to The Globe for examination, the AMF sent Mr. Fielding a letter informing him that there had been a mistake. He wasn't technically an insider after all, and that the fine would not have to be paid. He also produced e-mail correspondence from November that appeared to be between the AMF and a lawyer with Amaya, which detailed the screw-up.
Mr. Fielding had been classified as an insider of Amaya in the six months before the closing of its transaction with Intertain. But after Feb. 11, 2014, he was no longer considered to be an insider of Amaya and under no legal obligation to file with SEDI. In an e-mailed statement, a spokesperson with Amaya wrote that in December the AMF determined that Mr. Fielding was no longer an insider of Amaya "following discussions with Amaya's external legal counsel."
On Dec. 11, Amaya said it was co-operating with the AMF in an "investigation into trading activity" around the company's 2014 acquisition of Oldford Group and the company's headquarters were searched by the AMF under the supervision of the RCMP. That investigation is ongoing.
Mr. Fielding said that after the investigation was made public, he become aware of rumours that he had traded on insider information about Amaya, which he firmly denies. "I've heard my name being thrown around. This has caused me a lot of grief," he said. Mr. Fielding's trades are still listed on SEDI."It probably looks suspicious," he says. He is also clearly miffed that, despite the correction, the AMF hasn't removed his trading records.
The AMF declined to comment for this story.