Slater & Gordon launches class action against Star Entertainment Group

Slater & Gordon launches class action against Star Entertainment Group

Photo: Star Sydney, via Facebook.

After five months of investigations, law firm Slater & Gordon (ASX: SGH) has today filed a class action in the Victorian Supreme Court against The Star Entertainment Group (ASX: SGR) seeking compensation for shareholders who lost around $1 billion following media reports alleging corporate misconduct

The legal action follows yesterday's announced departure of longstanding Star Entertainment Group CEO Matt Bekier, and will automatically apply to anyone who purchased SGR shares between 29 March 2016 and 16 March this year - the day before a review of Star Sydney began in NSW that has since revealed explosive allegations. 

The review has so far heard claims that Star misled its banks and the NSW casino regulator, ignored clear risks of money laundering occurring at its properties, and had otherwise failed to operate ethically.

Slater & Gordon alleges Star's representations about its compliance with regulatory obligations were misleading or deceptive, and has prepared a 108-page statement of claim outlining the ways the casino operator has "continually held itself out as an ethical and responsible casino operator that complied with its legal and regulatory obligations".

Despite these assurances, the group's share price fell 25 per cent after widespread media reporting in October 2021 revealing Star had received high-roller players who were allegedly associated with criminal or foreign-influence operations, and had allegedly failed to comply with its obligations under anti-money laundering and counter-terrorism financing laws.

These allegations prompted the NSW Independent Liquor and Gaming Authority to announce an inquiry into whether Star remained suitable to hold its casino licence; an inquiry that is being led by Adam Bell SC, who had previously assisted the Bergin Inquiry which examined money laundering, criminal infiltration and governance failings at Crown Resorts (ASX: CWN).

The firm highlights how in 2019 Bekier stated publicly that although Star operated in the same market as Crown, the company he led conducted extensive due diligence on those it did business with.

“I am very confident that we are doing the best we can to run a clean and legal business… [and] I feel that what we do is both lawful and is executed in a way that should give us and our investors confidence that we are doing the right thing," Bekier said at the time.

Slater and Gordon class actions senior associate Ben Zocco said the firm’s investigation into Star began last October, and the analysis undertaken to date suggested that investors had a strong case.

"For the last six years, Star has held itself out to be a model casino operator that took its obligations seriously and followed not only the letter of the law, but the spirit of the law,” he said.

“Star insisted that it took compliance seriously and ran its business ethically, honestly and with integrity. Our investigations to date, in addition to the extraordinary evidence revealed so far in the Bell Inquiry, suggests that they did everything but.”

“When investors purchase shares in a listed company, they are entitled to assume that all of the material information relevant to its financial position had been disclosed to the market."

Zocco said Slater & Gordon's case was that Star had failed to disclose all the material information relevant to its financial position, and therefore investors were entitled to compensation for their losses.

Lead plaintiff David Lynch said that he was disappointed to see the value of his shareholding fall so significantly and was concerned that the company may have misled him and other shareholders by representing that it was far more compliant with its regulatory obligations than was actually the case.

"As an investor, I expect that licensed operators that are publicly listed will operate in accordance with the law, and that there are appropriate checks and balances to ensure they do so," he said.

"I am dismayed by the apparent scale of Star’s misconduct that is now being revealed in the public hearings."

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

EMVision unveils portable brain scanner for first responders

EMVision unveils portable brain scanner for first responders

Founder-led medical technology company EMVision (ASX: EMV) has toda...

Arena REIT to raise $140m amid plans to acquire or develop 10 childcare centres

Arena REIT to raise $140m amid plans to acquire or develop 10 childcare centres

Real estate investment trust Arena (ASX: ARF) has announced plans t...

SunRice acquires SavourLife, a pet food company that donates half its profits to saving rescue dogs

SunRice acquires SavourLife, a pet food company that donates half its profits to saving rescue dogs

SavourLife, a family-owned pet food company that has helped re-home...

DroneShield shares shot down despite record revenue and $1.1 billion pipeline

DroneShield shares shot down despite record revenue and $1.1 billion pipeline

DroneShield (ASX: DRO) shares lost more than 20 per cent of their v...