Star Entertainment Facing Third Class-Action Lawsuit Over Failure to Protect Investors
Posted on: February 7, 2023, 11:47h.
Last updated on: February 7, 2023, 12:18h.
In the wake of its ongoing crisis in Australia, casino operator Star Entertainment is finding another lawsuit added to a growing pile. Money laundering, gambling by known criminals, and other gross failures have brought out regulators and investors who want the company to pay for its transgressions.
This is the third class-action lawsuit against Star alleging noncompliance with anti-money laundering and counter-terrorism financing laws (AML/CTF). It comes by way of the Phi Finney McDonald law firm on behalf of investors.
Star acknowledged the securities class action suit, which is now in the hands of the Supreme Court of Victoria system. It explained that it pertains to the period between March 29, 2016, and June 13, 2022, coinciding with the other claims.
Poor Business Practices and Leadership
During that time, the company’s The Star casino allegedly made misleading statements about its AML/CTF policies and procedures, according to the suit. It also failed to disclose relevant information to the market regarding such matters. In addition, the casino’s executives directed the property’s activities against the interests of the community as a whole.
Star said in response to the suit that it will try to block the case, as the allegations are similar to those it’s already facing. Almost a year ago, Australian law firm Slater and Gordon filed a class-action lawsuit against the Star in response to what they described as misleading statements about legal compliance.
There are investors who have filed a refund request as a result of the share price falling by more than 25% since the ordeal began. This drop cost the company over AUD1 billion (US$692.3 million) in corporate profits.
Star then received a second class-action lawsuit in the Supreme Court of Victoria on November 7 of last year. The Maurice Blackburn law firm launched the case, and both of those are still active.
State governments across the country launched inquiries into Star’s actions after Crown Resorts found itself in a similar situation. They all reached the same conclusion – the company had a horrible track record of playing by the rules and didn’t deserve to keep its casino license.
However, none of them opted to permanently revoke Star’s status. Instead, regulators have been busy working out how to hit the company financially. New South Wales, for example, fined it AUD100 million (US$69.23 million). Then, Queensland did the same.
The Star and the Sky
Crown got the ball rolling, Star gave it momentum, and SkyCity Entertainment Group added additional fuel. The New Zealand-based casino operator runs the SkyCity Adelaide property in South Australia, which has found itself at the center of a money-laundering inquiry.
The inquiry has been underway for the past seven months, and there was an expectation that the final verdict would now be ready. While the investigation has now wrapped up, the decision on what happens next will have to wait.
A retired Supreme Court judge, Brian Martin, has prepared his findings and recommendations, but releasing the results hit a snag because the Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial watchdog, is also after SkyCity.
AUSTRAC took the company to federal court over its AML/CTF failings. Therefore, Martin believes that defining the company’s suitability can’t occur until that case runs its course. As a result, South Australia will have to wait. But for how long isn’t known.
There’s currently no concrete deadline for the conclusion of the AUSTRAC suit.
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Source: casino.org
