Posts Tagged ‘Las Vegas Sands SEC investigation’

Sands now being investigated by Hong Kong

Friday, April 1st, 2011

The investigation into alleged improper business practices by the Las Vegas Sands Corporation has now gone international. Sands China Ltd. issued a statement to the Hong Kong Stock Exchange saying that it is being investigated by Hong Kong’s Securities and Futures Commission, which is similar to the federal SEC in the United States.

In the brief statement, the casino said the investigation relates to “alleged breaches” of financial regulations and that they have been asked to turn over documents to the SFC. All of this is likely related to the current investigation by the U.S. Securities and Exchange Commission into whether or not the Sands is guilty of violating the Foreign Corrupt Practices Act.

That investigation, and likely the current Hong Kong investigation, stems from allegations made during a lawsuit by Steve Jacobs, the former CEO of Sands China. Jacobs was fired in July 2010 for what the company says are legitimate reasons. They said that he exceeded his authority and did not keep the board of directors informed on important business affairs. Jacobs alleges that he was fired for refusing to break the law by bribing and blackmailing Chinese government officials for favorable treatment in order to get a casino license. Aside from the extortion, Jacobs alleges that he was told to influence the government officials by making the major banks in China put pressure on them by threatening to withhold business.

Jacobs’s lawsuit is ongoing, as is the U.S. SEC investigation and the Hong Kong SFC investigation. If the allegations turn out to be true, the Sands and chairman Sheldon Adelson could be in a world of trouble in two countries.

SEC investigating Las Vegas Sands

Tuesday, March 1st, 2011

In what could be bad news for gambling expansion and investors, the Las Vegas Sands Corporation has revealed that it is being investigated by the U.S. Securities and Exchange Commission (SEC). The admission was part of the annual report that the Sands filed today. In that report, the corporation stated that it has received a subpoena from the SEC for an investigation.

According to the Las Vegas Sands, the SEC has subpoenaed them requesting documents relating to compliance with the Foreign Corrupt Practices Act (FCPA). The Department of Justice is also conducting a similar investigation into the business practices of the Sands. According to the Wall Street Journal, the U.S. has recently started enforcing the Foreign Corrupt Practices Act more aggressively. Eight of the ten largest settlements in FCPA matters occurred last year.

Ron Reese, a spokesman for the Las Vegas Sands, denied any wrongdoing and said that the government’s investigations are nothing more than “fact-finding inquiries.” He said that be believes that the investigation is taking place due to allegations made by Steve Jacobs, former CEO of Sands China.

The Foreign Corrupt Practices Act, passed by Congress in 1977, requires transparency and prohibits companies from making payments (read: bribes) to foreign officials in order to obtain or keep business in that country. Las Vegas Sands Corporation began in Nevada, but has expanded their reach and now makes most of their money in Macau, which is the largest gambling industry in the world (four times the size of Vegas). Sands currently has three casinos in Macau.

In July 2010, Jacobs was terminated. The company said that he had exceeded his authority and failed to keep the board of directors in the loop for important business decisions. Shortly after his termination, Jacobs filed a lawsuit against his former employer in a Nevada federal court. In the lawsuit, Jacobs alleged that the real reason he was fired was because he refused to carry out illegal demands by Sheldon Adelson, Chairman of the Las Vegas Sands.

According to Jacobs, he was told to arrange “secret investigations” on Macau government officials in order to use any negative information against them as blackmail. He also alleged that Adelson told him to threaten to withhold business from major banks in China unless those banks used their influence to convince the government officials to give the Sands favorable treatment.

If Jacobs’s allegations are true, those would be major criminal offenses, not just SEC rule violations but other federal and international crimes as well. Representatives from Las Vegas Sands have denied all allegations by Jacobs and say that they have not committed any SEC violations.

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