Sheldon Adelson Scorched in Derivative Lawsuit
LAS VEGAS (CN) - Sheldon Adelson cost investors in his Las Vegas Sands Corp. money by allowing "bribery, kickbacks, money laundering and other wrongful behaviors" a shareholder claims in a derivative complaint.
W.A. Sokolowski sued Adelson, Las Vegas Sands Corp. and nine other members of Sands board of directors in Federal Court.
The complaint accuses Adelson et al. of a laundry list of allegedly wrongful and sometimes illegal acts, in this country and Macau.
Sokolowski claims, inter alia, that Adelson and his board:
"(a) Conceal the fact that the Company's management was improperly misrepresenting Sands' internal controls in order to allow a widespread scheme of overseas bribery, kickbacks, money laundering and other wrongful behavior in violation of applicable federal and other laws and, thereafter, cover-up such wrongdoing;
"(b) Assign to the Board's Audit Committee and purportedly independent legal counsel, an 'investigation' that was intended as a pretext to avoid the individual defendants having to account to Sands for their wrongdoing;
"(c) Deceive the investing public, including shareholders of Sands, regarding the individual defendants' management of the company's operations;
"(d) Fail to comply with the books and record, and internal controls provisions of the Foreign Corrupt Practices Act (the 'FCPA') and the Bank Secrecy Act as well as conceal such violations of law;
"(e) Conceal material facts with respect to purported audits performed by PricewaterhouseCoopers LLP ('PWC'), of which defendant Frederick Hipwell ('Hipwell') is a partner;
"(f) Waste Sands' assets by means of, inter alia, causing the Board's Audit Committee to carry out a purported investigation of the wrongdoing alleged herein without any benefit flowing to the Company;
"(g) Cause the issuance and dissemination of Sands' 2013 Proxy Statement, which was false and misleading;
"(h) Use Sands' corporate assets to further the political interests of the Company's largest shareholders, Adelson and his wife;
"(i) Cause Sands to terminate its long-held plans to invest in a casino complex in Spain because of, inter alia, defendant Adelson's demand for relaxation of Spain's anti-money laundering laws, political activities and his negative reputation;
"(j) Disregard and/or intentionally breach the Company's Code of Business Conduct and Ethics as well as other written policies governing their conduct; and
"(k) Enhance the Individual defendants' positions as directors and/or officers of Sands while providing each of them with substantial compensation, power and prestige."
And that's just 3 pages of the 56-page lawsuit.
Sokolowski claims that Adelson personally benefited from the wrongdoing by receiving $2.5 million annually for security and transportation and giving jobs to his wife and stepdaughter.
Sokolowski seeks punitive damages for violations of the Securities Exchange Act, breach of fiduciary duty, waste of corporate assets, unjust enrichment, breach of duty of candor, breach of duty of loyalty, breach of contract and negligence.
He is represented by G. Mark Albright.