Eight former senior figures from SkyCity Entertainment Group are facing legal action brought by a shareholder who is seeking to recoup losses tied to a major regulatory penalty. The AU$67 million fine, imposed by Australia’s financial crime regulator AUSTRAC last year, followed a Federal Court ruling that found SkyCity had breached anti-money laundering (AML) and counter-terrorism financing laws.

Legal action targets ex-SkyCity leaders after AUSTRAC fine:

The shareholder behind the court action, Stephen Wright, has applied to the New South Wales Supreme Court to initiate a statutory derivative suit against the former executives and board members. If the court grants permission, any compensation awarded would go to SkyCity, minus litigation funding expenses.

The lawsuit alleges that the individuals named failed in their responsibilities of due care, diligence, and acting in good faith for the corporation’s benefit, specifically during the period between December 7, 2016, and December 14, 2022.

Among those named in the legal documents are former Chief Executives Graeme Stephens and Michael Ahearne, ex-Deputy Chair Bruce Carter, and several other high-ranking former officials, including past legal, compliance, and regulatory affairs heads. The case contends that the AU$67 million penalty was directly linked to compliance failures under their oversight.

Court filings cite previously submitted documents from AUSTRAC’s proceedings, including the statement of agreed facts, to support the claim that the individuals were either aware of or responsible for the lapses that triggered the enforcement action.

Carter, who previously chaired the board’s audit and risk committee and also served as a director at Crown Resorts, now leads ASC, Australia’s national submarine builder. According to the Australian Financial Review (AFR), other defendants include former general counsel Peter Treacy, ex-company secretary Joanna Wong, former regulatory affairs manager Phillip O’Connell, former head of legal and compliance Juliet Fletcher, and non-executive director Jennifer Owen, who also chaired SkyCity’s audit and risk committee during her tenure.

SkyCity’s broader compliance challenges:

The lawsuit is being closely monitored by investors in the wider casino and financial sectors, particularly following AUSTRAC’s penalties against other operators. Crown Resorts was fined AU$450 million in 2023, while Star Entertainment is currently contesting a proposed AU$400 million penalty, claiming that anything above AU$100 million could push the company into insolvency.

SkyCity’s own AU$67 million settlement stemmed from longstanding AML failures at its Adelaide casino, with AUSTRAC concluding that the operator had failed to implement adequate and sustained customer due diligence procedures.

An independent review of the Adelaide property had been paused until the fine was finalized in court, with completion expected by May of this year.

The legal proceedings are being funded by Litigation Capital Management (LCM) and handled by law firm King & Wood Mallesons. LCM emphasized that the structure of the case means there is “no cost” to SkyCity. However, the litigation funding model—which often involves claiming a portion of any awarded damages—continues to draw scrutiny for its impact on overall recoveries.

This type of investor-led action reflects broader pressure on corporate boards in the gaming and finance industries to account for past compliance failures. As enforcement activity intensifies, stakeholders are increasingly using legal avenues to seek accountability from directors and officers.

Although the case remains in an early stage, and none of the defendants have yet submitted formal defences, it follows a pattern of high-stakes shareholder actions seeking to hold individuals personally accountable for corporate regulatory breaches.