Las Vegas Sands Pays $9M to Settle SEC Claim

     LAS VEGAS (CN) – Las Vegas Sands agreed to pay a $9 million to settle Securities and Exchange Commission claims that it paid millions to a Chinese consultant to assist its efforts in China and Macau.
     “This matter concerns the failure of [Las Vegas Sands] to devise and maintain a reasonable system of internal accounting controls over its operations in the People’s Republic of China and the Macao Special Administrative Region (Macau) from 2006 through at least 2011,” the SEC said in a 15-page cease-and-desist order.
     The lack of controls resulted in more than $62 million being transferred to a consultant in China “under circumstances that frequently lacked supporting documentation or appropriate authorization,” the SEC said.
     The SEC said it accepted the $9 million settlement offer from Las Vegas Sands, because it cooperated with the SEC’s investigation and immediately initiated efforts to correct problems by hiring an independent consultant and replacing those in charge of its Macau operations.
     Most of the transfers occurred despite Sands senior management knowing they could not account for prior funds transferred to the Chinese consultant “in an environment where significant bribery risks were present,” the SEC said.
     “As a result of this conduct, [Las Vegas Sands] violated the internal controls and books and records provisions of the Foreign Corrupt Practices Act,” the SEC said.
     The SEC’s claims largely stem for Las Vegas Sands’ activities in China, which included trying to buy a professional basketball team in China to raise its profile, attempts to build a non-gaming resort on China’s Hengqin Island, establishing ferry service from China to Macau, and other ventures.
     Las Vegas Sands says the SEC’s investigation indicates more serious claims made by former Las Vegas Sands China President Steven Jacobs are false.
     “Not one of Jacobs’ allegations was the basis of those findings” by the SEC, Las Vegas Sands said in a statement Thursday.
     Jacobs filed wrongful termination complaints in federal and Clark County courts, and accusing Las Vegas Sands principal Sheldon Adelson and Las Vegas Sands of firing him in 2010 for refusing to engage in illegal and corrupt practices.
     Jacobs says Adelson and others pressured him to commit illegal acts to help establish Las Vegas Sands’ Macau enterprises, which now account for about 58 percent of the Las Vegas Sands’ revenues.
     The SEC said most of the improprieties occurred before Jacobs became president of Sands China for about nine months before his firing in 2010.
     Las Vegas attorney Todd Bice represents Jacobs and told the Las Vegas Review Journal “it would be silly” to claim the SEC’s case has no bearing on Jacobs’ wrongful termination claims.
     In addition to accepting the $9 million settlement, the SEC’s cease and desist order cautions against future violations of the Securities Exchange Act.

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