LVS Shareholders Sue Casino Giant Over Suspicious Transactions at Marina Bay Sands

Posted on: October 27, 2020, 08:47h. 

Last updated on: October 27, 2020, 12:13h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Las Vegas Sands Corp (LVS) is being sued by a group of investors over its alleged mismanagement of VIP money transfers at the Marina Bay Sands (MBS) in Singapore.

Marina Bay Sands
The Marina Bay Sands, seen here, is the world’s most profitable casino resort and an unmistakable feature on Singapore’s waterfront. (Image: Nicole-Marie Ng/Time Out)

The class-action suit has been filed by investor rights firm Bernstein Leibhard in the US District Court for the District of Nevada. It claims the company misled investors over the efficacy of its VIP anti-money laundering procedures at MBS in violation of the Securities Exchange Act.

In July, LVS settled a lawsuit for $6.5 million with a disgruntled high roller, who claimed that in 2015, MBS had transferred funds to other patrons from his casino deposit accounts without his approval.

According to 2019 court filings, the gambler, Wang Xi, deposited $6.5 million with MBS, which was later distributed via 22 unauthorized transfers to other guests at the hotel, all of whom were unknown to Wang.

Feds Investigate Money Laundering

The incident triggered an investigation by local authorities and subsequently the US Department of Justice. News that the feds were scrutinizing whether LVS had violated international anti-money laundering regulations caused the company’s stock price to dip by 2.9 percent in July.

In January, the DoJ issued a subpoena to MBS’s former head of compliance for documents pertaining to “money laundering facilitation” and possible violations of internal protocols, according to Bloomberg.

In September, Bloomberg reported LVS had “hired a law firm to conduct a new investigation into employee transfers of more than $1 billion in gamblers’ money to third parties, according to people familiar with the matter.”

This news caused LVS to fall a further 4.2 percent on September 16, the lawsuit alleges.

LVS’ Illicit Fund Transfers, Misleading Statements

The lawsuit claims that LVS made “materially false and misleading statements regarding the Company’s business.” These include the company’s failure to disclose that “weaknesses existed in Marina Bay Sands’ casino control measures pertaining to fund transfers,” and that “the Marina Bay Sands’ casino was consequently prone to illicit fund transfers that implicated, among other issues, the transfer of customer funds to unauthorized persons and potential breaches in the Company’s anti-money laundering procedures.”

These oversights “increased the risk of litigation against the Company, as well as investigation and increased oversight by regulatory authorities,” asserts the lawsuit.

MBS enjoys a duopoly in Singapore with Genting’s Resorts World Sentosa. Under normal circumstances, it is the most profitable casino resort in the world. MBS generaties almost a third of all revenues for LVS.

This week, it was reported that LVS is considering selling its properties in Las Vegas to concentrate on its more profitable operations in Singapore and Macau.