Judge Fines Las Vegas Sands Corp. $25,000 in Termination Lawsuit

September 17, 2012

A Nevada judge has fined Las Vegas Sands Corp. $25,000, citing its failure to disclose important information in a lawsuit filed by a fired executive against the casino company.

Clark County District Judge Elizabeth Gonzales has ruled that Las Vegas Sands showed an “intention to deceive the court” by failing to disclose that the information had been transferred from China to the U.S.

After Steven Jacobs was fired in 2010 as CEO of Sands China Ltd., a Sands subsidiary with extensive casino holdings in the Chinese enclave of Macau, he filed a wrongful termination lawsuit claiming he was let go for opposing company demands that he engage in improper conduct.

Sands denied the charges and said he was fired for cause.

Sands attorneys argued the transfer of about 100,000 emails and other documents that Jacobs’ attorneys had requested was held up by Macau’s Personal Data Protection Act, even though copies were in Las Vegas and beyond the reach of Macau authorities.

But Gonzales found the claims were false, and said she held nine unnecessary hearings in the case over a one-year period ending in May as a result.

The judge said key information had been moved to Las Vegas as early as August 2010, but that wasn’t disclosed to her until June of this year.

She ordered Las Vegas Sands to donate the $25,000 penalty to the Legal Aid Center of Southern Nevada, and to cover Jacobs’ legal bills for the nine unnecessary hearings.

Sands spokesman Ron Reese declined to comment.

At a court hearing this week, Stephen Peek, lead attorney for Las Vegas Sands, apologized on the witness stand for what he said was an effort to balance protecting the company under Macau law with being candid with the court.

“If I made a mistake in that balance, I’m sorry,” he said.

Las Vegas Sands, headed by billionaire casino mogul Sheldon Adelson, owns the Venetian and Palazzo resorts on the Las Vegas Strip, and the Marina Bay Sands in Singapore. Its majority-owned subsidiary, Sands China Ltd., runs the Venetian Macao and Sands Macao casino resorts, the Plaza Macao hotel, restaurant and shopping complex, and the Sands Cotai Central resort with three hotels and two casinos.

Adelson also is a prominent philanthropist and political donor to U.S. Jewish and Republican causes and candidates.

Jacobs’ lawsuit has drawn interest to the company from U.S. Justice Department and Securities and Exchange Commission investigators for possible violation of the Foreign Corrupt Practices Act. The law bars U.S. companies from paying foreign officials to “affect or influence any act or decision” for commercial benefit.

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