Shareholder sues Sands officials, accusing them of wasting millions of dollars
A Las Vegas Sands Corp. shareholder has filed a derivative lawsuit against Chairman and CEO Sheldon Adelson and members of the Sands board of directors, accusing them of wasting millions of dollars with ill-advised lawsuits and bad business decisions.
William Sokolowski, who says he has been a Las Vegas Sands shareholder since February 2012, filed the civil lawsuit Tuesday in Clark County District Court, seeking the appointment of a conservator or special master to take over the board’s role and for the company to reimburse losses to the company and its shareholders. Sokolowski did not disclose how many shares he has.
Sokolowski twice filed similar lawsuits against Sands in federal courts.
“The company will vigorously defend this suit, which is largely a rehash of two earlier cases brought by the same plaintiff and his lawyer in federal court,” Ron Reese, a Sands spokesman, said in an emailed response. “Both cases were dismissed and never appealed by him.”
Sokolowski’s six-count, 78-page complaint accuses the defendants of breach of fiduciary duty and waste of corporate assets, breach of the duty of candor, breach of the duty of loyalty, breach of contract and two counts of unjust enrichment.
The lawsuit asks the court to appoint someone “to oversee and direct to act in place of Sands’ board in connection with the company’s response to this litigation or any other pending shareholder derivative litigation in which one or more of the director defendants herein is named as a defendant.”
A derivative lawsuit is brought by a shareholder on behalf of a corporation against a third party, usually executives or board directors.
In addition to Adelson, the lawsuit names current or former board members Michael Leven, Jason Ader, Irwin Chafetz, Charles Forman, Irwin Siegel, Charles Koppelman, Jeffrey Schwartz, Robert Goldstein, Micheline Chau, Steven Gerard, George Jamieson, David Levi and George Koo as well as the company’s former auditor, Pricewaterhousecoopers LLC and its managing partner, Frederick Hipwell.
The lawsuit accuses the board and auditors of putting their loyalty to Adelson before their obligations to the company.
It focuses on a six-year court case that spurred investigations by the U.S. Justice Department, the Securities and Exchange Commission, the state Gaming Control Board and government investigators from China and Macau.
“The individual defendants have caused the company to expend … hundreds of millions of dollars to address these investigations, related litigation and the settlement …,” the lawsuit says.
Mark Albright, Sokolowski’s Las Vegas-based attorney, declined further comment on the lawsuit.
The confidential settlement of the case involving former Sands China executive Steven Jacobs was disclosed by the company in May.
That lawsuit led to Justice Department and SEC investigations into whether Sands officials violated the United States Foreign Corrupt Practices Act against bribing foreign officials.
In April, Sands agreed to pay a $9 million fine to settle SEC claims that the company didn’t properly document payments to a consultant working for the company beginning in 2006.
Sands didn’t admit wrongdoing as part of that settlement.
In April, the Nevada Gaming Commission approved a settlement and a $2 million fine against Sands for its alleged failure to uphold the reputation of the state’s gaming industry, stemming from the SEC complaint and a 2013 nonprosecution agreement Sands reached with U.S. Attorney’s Office for the Central District of California related to the company’s failure to file a suspicious casino activity report in a suspected money-laundering case.
All of those actions are referenced in the Sokolowski lawsuit.
The Review-Journal is owned by a limited liability corporation owned by the family of Sands chairman and CEO Sheldon Adelson.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
