Crown Resorts is facing another hurdle, with a new shareholder class action looming over the company.
The share price of the Australian gambling giant fell by 8% on October 19th, reducing the operator’s market value by $500 million, after Crown Resorts has been accused of misleading investors about the company’s compliance with anti-money laundering legislation for almost six years.
In October, the financial crime regulatory body AUSTRAC of the country revealed that it was investigating alleged anti-money laundering and counter-terrorism financing violations associated with the operations of Crown Melbourne casino. Now, law firm Maurice Blackburn claims that the gambling operator misleadingly represented its compliance with legal obligations and did not reveal relevant information from the market in the period from December 2014 until October 2020, when the AUSTRAC probe was unveiled.
A few days ago, a claim was lodged in the Victorian Supreme Court by the law firm, accusing Crown Resorts of being engaged in misleading or deceptive conduct for a six-year period. The group of investors who filed the lawsuit claim that they were misled by the gambling giant, which informed them it had effective controls in place to make sure it is compliant with Australian anti-money laundering legislation.
Crown Resorts is also facing allegations that it acted contrary to its investors’ interests, so the law firm is to ask the court to consider imposing a share buyback from the affected shareholders.
Australian Gambling Giant Already Facing Tough 2020
Law firm Maurice Blackburn is already pursuing Crown Resorts through a Federal Court lawsuit, seeking to bring back the money that was lost by the company’s shareholders because of a massive share price crash following the arrests of 19 Crown workers in China in 2016. The case is expected to go to trial in 2022.
So far in 2020, the Australian gambling giant has been shaken by a handful of problems. The probe that was held into the company’s operations by the NSW Independent Liquor and Gaming Authority revealed that Crown Resorts had failed to prevent money laundering from taking place at its casinos in Melbourne and Perth.
As unveiled by the lawyer who runs the case, Crown Resorts’ investors would have expected the company to remain compliant with anti-money laundering regulation, especially considering the fact that the group has publicly claimed that it took those obligations seriously.
Previously, the Australian Transaction Reports and Analysis Centre (AUSTRAC) identified its concerns regarding the compliance of the Australian casino operator during a compliance assessment that took place in September last year. At the time, the watchdog said that the customer management of Crown Melbourne had been identified as high risk and politically exposed persons.
- Author
Olivia Cole
