Australia’s Star Entertainment Group says it will defend a securities class action brought against it by law firm Phi Finney MacDonald in the Supreme Court of Victoria.
The action claims that between the period 29 March 2016 and 13 June 2022, Star made misleading representations about its systems and processes for compliance with anti-money laundering and counter-terrorism financing obligations, that it failed to disclose relevant information it had about those matters to the market, and that it conducted its affairs contrary to the interests of the members of The Star.
It also points to a dramatic fall in Star’s share price from AU$4.58 the day before reports emerged alleging the company had ignored money laundering risks linked to its relationship with Asian junkets to AU$3.21 six days later. Star’s share price was AU$1.92 at close of business on Monday.
In a statement, Star said it intends to defend against claim, which is seeking compensation for class action members.
“The claim is substantially similar to the separate securities class actions filed by Slater & Gordon announced on 30 March 2022 and Maurice Blackburn announced on 7 November 2022. The Star intends to defend the proceedings,” it said.
The latest setback for Star comes after the company was found unsuitable to hold casino licenses in NSW and Queensland, with a review into The Star Sydney’s operations last year detailing a wide range of reasons for its finding, including the illegal use of China UnionPay cards to fund gambling at The Star Sydney, Star’s dealing with Asian junket operator Suncity Group and the company’s response to independent audits of its anti-money laundering (AML) and counter terrorism financing (CTF) controls.
Star was subsequently hit with a record AU$100 million (US$62 million) fine by the recently formed NSW Independent Casino Commission (NICC), followed by another AU$100 million fine in Queensland where it operates The Star Gold Coast and Treasury Brisbane.
All of Star’s NSW and Queensland casinos are currently under the supervision of independent monitors as the company fights to return to suitability.
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