Leading law firm Maurice Blackburn Lawyers is preparing a class action against casino operator, Star Entertainment Group Ltd (ASX:SGR) (formerly Echo Entertainment Group Ltd (ASX:EGP)) on behalf of its shareholders following revelations of alleged inadequacies in Star’s systems for ensuring compliance with its obligations for managing anti-money laundering (AML) and counter-terrorism financing (CTF) risks.
The alleged inadequacies were revealed in news reports last week that revealed a 2018 KPMG audit report warned the company’s board that there was “inadequate resourcing in place to operate the AML/CTF Program” and that its risk assessment system “does not consider terrorism financing as required by the AML/CTF Act”.
The report also highlighted parts of Star’s operations where AML/CTF risks may be higher, such as its operation of junket tours for its “high-roller” customers.
On October 11, the day following the revelations, Star’s share price plunged 23 per cent, reportedly wiping out nearly $1 billion from the company’s market value.
Maurice Blackburn Principal Vavaa Mawuli said the class action would allege that Star engaged in misleading and deceptive conduct, breached its continuous disclosure obligations and conducted its affairs contrary to the interests of members as a whole in the period.
“Shareholders rightfully expect casino operators to rigorously comply with anti-money laundering and counter-terrorism financing laws because casinos are unmistakably targets for criminal activity,” Ms Mawuli said.
“Shareholders had a right to expect open and transparent information from Star. Instead they got a crooked crap game.”
“The fact that these concerns were raised in 2018 and not disclosed to the market raises real concerns about Star’s governance and shareholders should be rightfully concerned.”
“Anti-money laundering laws are designed to promote public confidence in the Australian financial system. Investors are entitled to expect gaming companies to engage in best practice. That doesn’t appear to have occurred at Star.”
Maurice Blackburn is already conducting two cases against Star’s major competitor Crown over similar allegations.