Crown’s share price fell over 8 per cent on October 19 after news emerged that anti-money laundering agency AUSTRAC had initiated a formal enforcement investigation into Crown, having identified potential non-compliance by Crown Melbourne with anti-money laundering (AML) financing laws.
Maurice Blackburn Lawyers on Friday lodged the new class action with the Supreme Court of Victoria alleging Crown had engaged in misleading or deceptive conduct during the period from 11 December 2014 to 19 October 2020 by representing that it had robust or effective systems for ensuring compliance with its AML obligations, including as they applied to its VIP international business and engagement with overseas junket tour operators, and had not disclosed relevant information to the market.
The claim also alleges that Crown conducted its affairs during that period in a manner that was contrary to the interests of shareholders and is seeking an order from the court that the company buy back shares from affected investors.
At Crown’s AGM on 22 October, following weeks of damaging evidence at the NSW Casino Inquiry, chairwoman Helen Coonan “unreservedly apologised” for Crown’s “governance and risk management failings”. On 19 November Crown conceded to the NSW Casino Inquiry that it was “more probable than not” that criminals had laundered money through two of its bank accounts. Those concessions followed on evidence given by Crown directors and personnel at the NSW Casino Inquiry including that:
The new class action follows a separate, on-going class action against Crown launched by Maurice Blackburn in 2017 on behalf of shareholders who purchased Crown shares in the period 6 February 2015 to 16 October 2016. That class action followed on a fall in the company’s share price on 16 October 2016 after revelations that 19 Crown employees had been detained in China on suspicion of engaging in illegal marketing of its gambling services.
Lead plaintiff Greg Lieberman, a father of four from Sydney, said he invested in Crown believing it was a responsible company with strong governance.
“It’s been very disappointing to learn how badly Crown has behaved. The company held itself out as a good corporate citizen and has let a lot of us down. I didn’t expect to be investing in a cowboy outfit,” Mr Lieberman said.
Maurice Blackburn Principal class actions lawyer Miranda Nagy said shareholders would expect Crown to have best-practice governance and to have complied with laws designed to combat money laundering.
“We believe these governance failures have caused real loss to shareholders who would have expected best-practice compliance with anti-money laundering obligations, especially given Crown’s repeated public statements that it took compliance with such laws seriously. Instead it appears Crown’s systems left the company potentially exposed to criminal activity happening on its premises and through its bank accounts.”
“An object of the anti-money laundering laws is to promote public confidence in the Australian financial system by the detection and disruption of money laundering. Investors are entitled to rely on gaming companies to implement systems that will ensure rigorous compliance with all such laws, because casinos are unmistakable targets for criminal activity.”
Ms Nagy said further, “We believe there is a basis to say Crown did not merely mislead and fail to disclose information to the market, it really conducted its affairs in a manner that was deleterious to shareholders’ interests as a whole. We are asking the Court not just to award compensation where appropriate, but also to consider requiring Crown to buy back investors’ shares at a fair value and to implement a proper anti-money laundering training program delivered by an accredited professional, so this conduct never recurs.”
Shareholders that purchased Crown shares in the period from 11 December 2014 to 18 October 2020, or who owned shares as at 10 December 2014 and held them until at least 18 October 2020, can participate in the class action.
Paddy Murphy at Maurice Blackburn Lawyers on 0490 297 391
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