The Federal Court of Australia ruled on Wednesday that two former executives of Star Entertainment Group breached the Corporations Act 2001 by failing to properly manage and report risks of money laundering and criminal activities. This is a key decision since ASIC initiated lawsuits against 11 former directors and executives in December 2022. In plain terms, the regulatory crackdown has moved from the corporate level to specific individuals, with those in charge of risk management facing the consequences first.
Court ruling: CEO and legal executives failed to fulfill their duties
Judge Lee noted in the decision that the former CEO and Managing Director, as well as the former Chief Legal and Risk Officer, failed to take adequate measures to address the money laundering risks faced by the casino operator and failed to fully inform the board of these critical compliance issues. This is the latest setback for Star Entertainment, which was previously sought by AUSTRAC in June 2025 to impose a fine of 400 million Australian dollars for a series of anti-money laundering violations over the years, from inadequate reporting processes to lack of management oversight.
Legal basis: Section 180 of the Corporations Act and individual responsibility
ASIC's charges focused on Section 180 of the Corporations Act, which requires directors to exercise the care and diligence that a reasonable person would have in their position. The court found that the two executives breached this duty. Under the Corporations Act, such violations can lead to civil penalties, including fines of up to 1.05 million Australian dollars per violation and potential disqualification from directorship in the future. The court has not yet made a specific penalty decision. The other nine former directors and executives were not found to have violated the law, highlighting the court's emphasis on the responsibility of senior management directly responsible for legal and risk oversight.
Case background: Four years of accountability, new CEO appointed this week
ASIC initiated the lawsuit in December 2022, and after more than four years, a ruling was finally made. This week also marks the appointment of a new CEO for Star Entertainment's Sydney casino. Interested in the latest cases of global gaming industry executive responsibility? PASA official website continues to track.
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