Court Asked to Take Over Vegas Sands From Adelson

     LAS VEGAS (CN) — Las Vegas Sands Chairman Sheldon Adelson’s bad decisions have cost the company hundreds of millions of dollars, and a court should take control of the company, a shareholder says in a derivative complaint in Clark County Court.
     William A. Sokolowski says he bought shares in Las Vegas Sands in February 2012, and that since then decisions largely made by Adelson and current and former board members have violated fiduciary duties to shareholders.
     Sokolowski wants the court to take control of the company and shareholders reimbursed for losses.
     The 78-page complaint accuses Adelson of “operating the company in an illegal manner, including knowingly violating and thereafter covering up of, inter alia, various provisions of the Foreign Corrupt Practices Act, the Bank Secrecy Act, the Securities and Exchange Act of 1934, and the Sarbanes-Oxley Act.”
     Sokolowski says Sands board members have done nothing to “implement appropriate controls to prevent hundreds of millions of dollars from being paid out without appropriate documentation or authorization, acquiescing in money laundering at the company’s casinos in violation of the Bank Secrecy Act and by wasting corporate assets in a personal vendetta against his former colleague, Steven C. Jacobs, the former president of Sands China, who has just settled a lawsuit in this court.”
     Breaches of fiduciary duty include putting loyalty to Adelson above loyalty to the company and its shareholders; wasting corporate assets in “overly aggressive and improper litigation;” and giving Adelson free rein in Macau, where Sokolowski says evidence indicates Adelson “concealed ties to Chinese organized crime and ordered bribery and blackmail of government officials.”
     Sokolowski also claims Adelson and his board acquiesced to money laundering, which they tacitly admitted by agreeing to pay $75 million settle with the Department of Justice.
     He says a proposed casino development in Spain was scrapped because Adelson demanded that the country relax its money laundering laws, and that board members turned a blind eye when the company provided prostitutes for high-rollers and took other unethical and unlawful actions, including disseminating false information.
     He accuses Adelson et al. of breach of fiduciary duty, waste of corporate assets, unjust enrichment, breach of contract, breach of loyalty and breach of duty of candor.
     He asks the court to appoint a conservator or special master to oversee Las Vegas Sands’ handling of shareholder derivative lawsuits; appoint a compliance officer to ensure Sands’ compliance with federal laws; and declare that current and former board members violated their fiduciary duty to the Sands and its shareholders.
     He also wants Adelson et al. ordered to repay Las Vegas Sands for damages caused by their decisions and a declaration that co-defendants PricewaterhouseCoopers, Las Vegas Sands’ former auditor, and its managing partner, Frederick Hipwell, breached their agreements with Las Vegas Sands and caused damages.
     He wants the court to order Las Vegas Sands to “reform and improve its corporate governance, compliance and internal control procedures” to prevent further occurrences.
     And he seeks exemplary damages, attorney’s fees and costs.
     Named as defendants are Adelson, and Las Vegas Sands Board members Michael A. Leven, Jason N. Ader, Irwin Chafetz, Charles D. Forman, Irwin A. Siegel, Charles A. Koppelman, Jeffrey H. Schwartz, Robert G. Goldstein, Micheline Chau, Steven L. Gerard, George Jamieson, David Levi, George P. Koo, Hipwell and PricewaterhouseCoopers.
     Las Vegas Sands is a nominal defendant.
     Sokolowski’s attorney G. Mark Albright was not immediately available by telephone Wednesday. Las Vegas Sands Vice President Ron Reese did not respond to an email request for comment

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