Canaccord Genuity clears air on Amaya probe

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After rumours of impropriety sank its stock on Friday, Canaccord Genuity Corp. wants its employees and investors to know it hasn't been targeted for any wrongdoing.

Canaccord's stock fell 16 per cent late last week following news that Quebec's securities watchdog is probing trading activity surrounding Amaya Inc.'s blockbuster takeover of the PokerStars and Full Tilt Poker franchises. Because Canaccord advised on the takeover, and because there wasn't much clarity as to what the Autorité des marchés financiers is looking into, rumours started to spread that the investment bank could be in serious trouble.

To clear the air, chief executive officer Paul Reynolds sent a note to all employees Monday morning.

"I assure you that Canaccord Genuity is not the subject of this investigation, nor is any member of our capital markets group. This is strictly a request for information related to individual trades in our client accounts."

Mr. Reynolds also noted that Canaccord has complied with the regulator's requests, and that similar inquiries are received from time to time – suggesting this one isn't out of the ordinary. He added that "we have conducted a thorough internal investigation and remain confident that all employees of Canaccord Genuity have acted in good faith and with high integrity."

To make it even more clear, he said: "… This is not an investigation into Canaccord Genuity or any of the professionals who worked on the transaction. Our firm is merely providing information to assist the regulator in a normal-course examination."

Officials with Quebec's AMF conducted a search of Amaya headquarters in the Montreal suburb of Pointe-Claire last Wednesday. Officers with the RCMP were also present but only to provide assistance to the regulator in the form of security, a spokesman with the force said. The RCMP is not part of the probe.

Amaya released a statement late Thursday night saying it is co-operating with the regulator "in an investigation with regards to trading activities in Amaya securities surrounding the corporation's acquisition of Oldford Group in 2014." Amaya said that, to its knowledge, the probe does not involve any allegations of wrongdoing by the company.