The problems at Crown Resorts (ASX: CWN) continue to mount after it was reported a class action lawsuit has been launched by shareholders.
The post Crown Resorts’ (ASX:CWN) woes continue on latest lawsuit appeared first on The Motley Fool Australia. –
The problems for casino operator Crown Resorts Ltd (ASX: CWN) continue to mount. This comes after it was reported that a class action lawsuit has been launched by a group of Crown shareholders who are alleging “misleading and deceptive” conduct by the company.
At the time of writing, the Crown share price has edged just over 1% higher to $9.82 despite the news report.
More about the lawsuit
The class action lawsuit has been launched by law firm Maurice Blackburn on behalf of a group of Crown investors.
The law firm is pushing for compensation for shareholders who lost money as the Crown share price fell in the wake of a series of revelations.
The Crown share price has fallen by over 18% this year with $500 million of market value being lost on 19 October alone. This occurred when it was revealed the casino was being investigated for potentially breaching money laundering laws.
The latest lawsuit claims that Crown engaged in misleading or deceptive conduct from December 2014 through to October 2020, telling investors it had effective controls in place to comply with anti-money laundering (AML) laws. This is despite the company conducting its affairs “contrary to the interest of members” in the period, according to the claim.
In a novel legal approach, the claim has asked the court to order Crown to buy back shares from affected investors at “fair value.”
Other problems facing Crown
This is not the first class action lawsuit made against Crown by legal firm Maurice Blackburn. Earlier this year, the law firm also launched a $1.3 billion lawsuit on behalf of Crown shareholders.
That lawsuit claimed the Crown share price dove by 14% in October 2016 after it was revealed 19 Crown employees were arrested and charged with gambling-related crimes in China.
The casino operator is also currently facing an inquiry by the New South Wales Government following an investigation by Austrac, which revealed the casino had paid illegal junket operators to attract high rollers from mainland China. Austrac is the Australian government intelligence agency set up to monitor money laundering, organised crime, and fraud.
That inquiry is ongoing, and will decide whether the company is fit to hold a license in NSW. The opening of Crown’s Sydney casino has also been delayed until February 2021, pending the outcome of the inquiry.
Last Friday, Austrac released its risk assessment of junkets operating in Australia’s gaming sector. The assessment reported that junkets posed a high level of criminal risk and harm to the community.
How has the Crown share price performed in 2020?
The Crown share price has fallen by 18.3% in 2020. Crown shares began the year at $12.02 before dropping to around $6 in March, as COVID-19 lockdown restrictions forced the closure of the company’s venues. The Crown share price has since recovered to today’s levels, but is still a long way off its 52-week high of $12.71.
The company currently commands a market capitalisation of around $6.6 billion.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Crown Resorts (ASX:CWN) share price falls as Austrac calls junkets high risk
- Here’s why the Crown (ASX:CWN) share price is pushing higher today
- Crown Resorts (ASX:CWN) share price is up 6% despite Fitch downgrade
- ASX 200 rises again on Monday
- Why the Crown (ASX:CWN) share price is dropping lower again today
Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.