Entertainment
Eight former senior executives of SkyCity Entertainment Group are being sued by a shareholder seeking to recover the AU$67 million ($43.56 million USD) penalty the casino operator paid for failing anti-money laundering obligations.
SkyCity Execs Sued Over AUSTRAC Fine
Stephen Wright, the shareholder pursuing the legal action, has filed an application with the New South Wales Supreme Court to launch a statutory derivative suit against the former executives and board members. If approved by the court, any compensation awarded would be paid to SkyCity, after deducting litigation funding costs. The lawsuit claims that the named individuals breached their duties of care, diligence, and good faith in serving the best interests of the company, particularly during the period from December 7, 2016, to December 14, 2022. The penalty was issued last year by AUSTRAC, Australia’s financial crime regulator, after the Federal Court determined that SkyCity had violated anti-money laundering and counter-terrorism financing regulations.
The legal filings name several former top executives, including ex-CEOs Graeme Stephens and Michael Ahearne, former deputy chair Bruce Carter, and other senior figures who previously held key roles in legal, compliance, and regulatory affairs. The case argues that the AU$67 million fine imposed on the company stemmed from compliance failures that occurred under their leadership.
Bruce Carter, who once chaired the board’s audit and risk committee and was also a director at Crown Resorts, now heads ASC, Australia’s national submarine manufacturer. According to some sources, additional defendants include former general counsel Peter Treacy, former company secretary Joanna Wong, ex-regulatory affairs manager Phillip O’Connell, former head of legal and compliance Juliet Fletcher, and non-executive director Jennifer Owen, who also led SkyCity’s audit and risk committee during her time on the board.
More About the Case
SkyCity’s fine arose from longstanding anti-money laundering shortcomings at its Adelaide casino. AUSTRAC found that the company had failed to maintain proper and consistent customer due diligence processes. An independent review of the Adelaide operation had been on hold pending the court’s approval of the fine, with the review expected to be completed by May this year.
The lawsuit is being financed by Litigation Capital Management (LCM) and managed by the law firm King & Wood Mallesons. LCM noted that the case’s structure ensures there is “no cost” to SkyCity. However, the litigation funding model, in which funders typically take a portion of any damages awarded, remains under scrutiny for potentially reducing the total amount recovered. This shareholder-led action reflects a broader trend of growing pressure on corporate boards in the gaming and financial sectors to address past compliance failures. With regulatory enforcement on the rise, stakeholders are increasingly turning to the courts to hold directors and executives accountable.
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Stefan Velikov