78-page court filing alleges bad decisions cost shareholders millions and that executive management violated fiduciary duties to shareholders
Sheldon Adelson's Las Vegas Sands gambling group faced another court fight this week following a Clark County Court filing by shareholder William A. Sokolowski alleging that decisions largely made by Adelson and current and former board members have violated fiduciary duties to shareholders.
Invoking the provisions of the Foreign Corrupt Practices Act, the Bank Secrecy Act, the Securities and Exchange Act of 1934, and the Sarbanes-Oxley Act, the filing claims that Adelson operated the company in an illegal manner, including knowingly violating and thereafter covering up of, inter alia, various provisions of the US laws.
The filing appeals to the court to take control of the company and ensure that shareholders are reimbursed for their losses.
Sokolowski says Sands board members have done nothing to "implement appropriate controls to prevent hundreds of millions of dollars from being paid out without appropriate documentation or authorization, acquiescing in money laundering at the company's casinos in violation of the Bank Secrecy Act and wasting corporate assets in a personal vendetta against his [Sokolowski's] former colleague, Steven C. Jacobs, the former president of Sands China, who has just settled a lawsuit in this court.".
The plaintiff claims that managers place loyalty to Adelson above that to the company and shareholders, and accuses them of wasting corporate assets in "overly aggressive and improper litigation;" and giving Adelson free rein in Macau, where Sokolowski claims evidence indicates Adelson "concealed ties to Chinese organized crime and ordered bribery and blackmail of government officials."
The filing also accuses LVS management of acquiescing to money laundering, which they tacitly admitted by agreeing to pay $75 million to settle with the US Department of Justice.
And it alleges that a proposed casino development in Spain was scrapped because Adelson demanded that the country relax its money laundering laws, and that board members turned a blind eye when the company provided prostitutes for high-rollers and took other unethical and unlawful actions, including disseminating false information.
Among the serious accusations levelled at Adelson and his executives are waste of corporate assets, unjust enrichment, breach of contract, breach of loyalty and breach of duty of candour.
The plaintiff asks the court to appoint a conservator or special master to oversee Las Vegas Sands' handling of shareholder derivative lawsuits; appoint a compliance officer to ensure Sands' compliance with federal laws; and declare that current and former board members violated their fiduciary duty to the Sands and its shareholders.
He also wants Adelson et al. ordered to repay Las Vegas Sands for damages caused by their decisions and a declaration that co-defendants PricewaterhouseCoopers, Las Vegas Sands' former auditor, and its managing partner, Frederick Hipwell, breached their agreements with Las Vegas Sands and caused damages.
The filing names as defendants Adelson, and Las Vegas Sands Board members Michael A. Leven, Jason N. Ader, Irwin Chafetz, Charles D. Forman, Irwin A. Siegel, Charles A. Koppelman, Jeffrey H. Schwartz, Robert G. Goldstein, Micheline Chau, Steven L. Gerard, George Jamieson, David Levi, George P. Koo, Hipwell and PricewaterhouseCoopers.
Las Vegas Sands has not yet responded to the filing.
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Online Casino News Courtesy of Infopowa