Canadian CEOs who are in hot water

[David Baazov, Amaya Inc. CEO, looks on prior to the AGM in Montreal on June 22, 2015. Reuters/Christinne Muschi/Files]

By Dani-Elle Dubé

David Baazov, CEO and creator of Amaya Inc., is in hot water after it was alleged last month that he was the main source of privileged insider trading information. According to The Canadian Press, documents released by Quebec’s securities watchdog allege friends and associates of Baazov and his brother pocketed almost $1.5 million in profits from insider information they received about acquisitions from as far back as two years ago.

On March 23, Baazov was charged with aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of securities of Amaya and communicating privileged information. He has been placed on an indefinite paid leave of absence from the company, effective March 28.

In a statement released Tuesday, Baazov wrote, “As always, I continue to be dedicated to doing the right thing for Amaya and all its stakeholders. I believe that stepping down in the short term will help to avoid distraction for the company and its management while I vigorously contest all allegations made against me and pursue my bid to acquire the company.”

Baazov isn’t the only Canadian CEO who face allegations. Here are four other examples.

[Michael Pearson, Valeant Pharmaceuticals CEO, speaks during the AGM in Laval, Que., on May 19, 2015. REUTERS/Christinne Muschi]

Michael Pearson, CEO of Valeant Pharmaceuticals International Inc.

Montreal-based Valeant Pharmaceuticals International Inc. is a multinational pharmaceutical company known for manufacturing and marketing pharmaceutical products for a range of health ailments for almost 15 years.

It wasn’t until 2010 when Michael Pearson became CEO, after serving as the chairman of the board for two previous years before Valeant merged with several other pharmaceutical giants.

But this month Pearson was subpoenaed to testify at a Senate committee hearing this month that is investigating major increases in drug prices.

Valeant has become one of the companies known for raising prices on some of its critical drugs to the point where they’re out of reach for patients needing the medications to survive. The company has denied these allegations, according to CTV News.

In February, the company said it had to re-evaluate its financial results for the 2014-15 year after it found that about US$58 million of sales were declared at the wrong time.

In light of these controversies, Valeant announced Monday that it would be replacing Pearson as CEO.

“It’s been a privilege to lead Valeant for the past eight years,” Pearson said in a statement. “While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership.”

Pearson will remain the company’s CEO until a successor is named.

[Robert Card/Twitter]

Robert Card, former CEO of SNC-Lavalin

SNC-Lavalin is one of Canada’s leading engineering and construction firms founded in the early 1900s. It, too, is another Montreal-based company plagued with scandal.

Back in 2012, Robert Card was named CEO — a move the company hoped would help clean up its long list of past issues with a handful of executives including former CEO Pierre Duhaime allegedly involved in money laundering, bribery and corruption in places like Libya, Bangladesh, Algeria and Montreal.

In February 2015, SNC-Lavalin and two of its subsidiaries faced one fraud and one corruption charge after the RCMP laid criminal charges in connection to an investigation into a deal with Libya, according to the Financial Post. The investigation was aided by Riadh Ben Aissa, the former vice-president of SNC-Lavalin’s construction division.

The Mounties allege SNC-Lavalin paid almost $47.7 million to public officials in Libya between 2001 and 2011 to influence government decisions and alleges defrauding various Libyan organizations of about $129.8 million, The Canadian Press reported.

The court date for the case’s preliminary hearing isn’t until the fall of 2018.

In the meantime, The Canadian Press is reporting that SNC-Lavalin has filed lawsuits seeking to recover almost $145 million the company says was embezzled by Ben Aissa and former executive vice-president Sami Bebawi, who was charged with fraud over $5,000, laundering proceeds of crime, possession of property obtained by crime, bribing a foreign public official and obstructing justice.

[Ashley Madison founder Noel Biderman poses with a poster during an interview at a hotel in Hong Kong on Aug. 28, 2013. REUTERS/Bobby Yip]

Noel Biderman, former CEO of Avid Life Media Inc.

It was a system breach that had many men and women across the world biting their nails.

It was July 2015 and hackers (known as “The Impact Team”) hacked into the infamous website AshleyMadison.com, and leaked data about the website’s 32 million users, such as email addresses and account details. Its Toronto-based parent company, Avid Life Media Inc., is also known for other websites like CougarLife.com and EstablishedMen.com and was headed by Noel Biderman at the time.

Many users felt betrayed by Avid Life Media, particularly since its Ashley Madison website promised security to its users. Despite encrypting passwords, the Ashley Madison systems weren’t as secure as the website claimed.

As a result, over $500 million in lawsuits have been piling up for the company from users in the United States and Canada alleging negligence in protecting confidential user data, according to Wired.

Then there was the issue of made up profiles. Data analysis by Gizmodo reveal that only about 12,000 of the website’s 5.5 million female profiles were actual women who used the website.

In August 2015, Birderman stepped down from his CEO role at Avid Life Media.

“The change is in the best interest of the company and allows us to continue to provide support to our members and dedicated employees,” the company said in a statement. “We are actively adjusting to the attack on our business and members’ privacy by criminals.”

Biderman, a Canadian Internet entrepreneur and former sports agent, now works as a business consultant in Toronto, according to his website NoelBiderman.com. There is no mention of him on his website as being the creator or CEO of AshleyMadison.com.