Australian law firms Slater & Gordon and Maurice Blackburn have announced they are investigating possible class actions against Star Entertainment Group around alleged inadequacies in in the company’s internal systems for ensuring compliance with its anti-money laundering (AML) counter-terrorism financing (CTF) obligations.
According to a statement issued by Maurice Blackburn on Monday, “The proposed class action will 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.”
The company is calling for anyone who purchased Star shares between 12 October 2015 and 11 October 2021 to come forward.
Slater & Gordon’s Class Actions Practice Group Leader Emma Pelka-Caven said the firm was investigating whether shareholders had suffered losses as a consequence of materially incorrect information being available to the market.
“We consider that the information released may give rise to a claim on behalf of shareholders against the company,” Pelka-Caven said.
“At the time they purchase shares in a listed company, investors are entitled to assume that all of the material information relevant to its financial position has been disclosed.”
In response, Star said it is not aware of any proceedings having been filed, has not been served with any originating process with respect of any class action proceedings and should any proceedings commence, “The Star intends to defend any such proceedings.”
The possible class action follows media reports last week alleging Star had enabled suspected money laundering, organized crime, fraud and foreign interference by cultivating high-roller gamblers with links to organized crime while ignoring red flags over the source of client funds.
In particular, the media outlets point to a report by international auditor KPMG, commissioned by Star and presented to its Board of Directors, which outlined apparent failings in Star’s anti-money laundering procedures. The report warned that Star’s AML procedures do “not consider terrorism financing as required by the AML-CTF [anti-money-laundering and counter-terrorism financing] Act,” that its assessments of certain gamblers “appear to understate the level of money-laundering risk” and that the company had “no documented money-laundering risk assessment, or risk-assessment methodology” to be applied to Asian junket operators.
Star has described the allegations as “misleading” and in a lengthy response filed with the ASX last Tuesday said it has taken significant action in response to the KPMG report, including adopting all recommendations and working with Australia’s AML regulator AUSTRAC to ensure it was satisfying its AML obligations.
