A major legal setback has hit The Star Entertainment Group, after Australia’s Federal Court ruled that two former senior executives breached their legal duties by failing to properly manage money-laundering risks within the company.
The decision was delivered by Justice Lee as part of civil penalty proceedings brought by the Australian Securities and Investments Commission.
The court concluded that the company’s former chief executive and managing director, along with its ex-chief legal and risk officer, did not take sufficient action to address serious anti-money laundering risks within the casino group. The ruling also found that they failed to properly inform the board about the scale of those risks.
Failure of oversight and reporting
The case centred on section 180 of Australia’s Corporations Act 2001, which requires company directors and officers to exercise reasonable care and diligence in their roles.
According to the court, the two executives fell short of that standard when overseeing compliance systems designed to identify and report suspicious financial activity. Justice Lee said they did not implement adequate measures to manage potential money laundering and other criminal activity risks within the business.
A key finding was the failure to escalate compliance concerns to the company’s board, depriving directors of critical information needed to properly assess the risks facing the operator.
Part of wider enforcement against Star
The judgment adds to a series of regulatory challenges facing Star Entertainment.
Last year, the company was targeted by AUSTRAC following a long-running investigation into anti-money laundering failures. In June 2025, AUSTRAC sought a penalty of approximately AU$400 million against the operator over multiple AML breaches spanning several years.
Regulators alleged that weaknesses in reporting systems and management oversight allowed suspicious transactions to occur without adequate scrutiny.
Individual accountability highlighted
The civil case originally targeted 11 former directors and officers. However, the court determined that only the two senior executives responsible for legal and risk management functions had breached their obligations.
The remaining nine individuals were cleared of liability.
Under the Corporations Act, breaches of duty can result in substantial civil penalties. Each violation carries potential fines of up to AU$1.05 million and may lead to disqualification from holding company directorships.
Specific penalties have not yet been imposed and will be determined in a later stage of proceedings.
Another turbulent chapter
The ruling arrives during a period of ongoing restructuring for Star Entertainment. The operator recently appointed a new chief executive for its Sydney casino, as the company attempts to rebuild credibility following years of regulatory scrutiny.
For regulators, the judgment reinforces a growing trend in corporate enforcement: holding individual executives personally accountable when governance failures expose companies to financial crime risks.