Gaming giant Las Vegas Sands said in an SEC filing last week that an internal investigation found possible FCPA violations.
The company said the likely violations were of the books and records and internal controls provisions of the FCPA, not the antibribery provisions.
Last year, a story published by ProPublica and PBS' Frontline said internal documents showed that Las Vegas Sands boss Sheldon Adelson 'instructed a top executive to pay about $700,000 in legal fees to Leonel Alves, a Macau legislator whose [law] firm was serving as an outside counsel to Las Vegas Sands.'
The report said the Sands' general counsel and an outside law firm 'warned that the arrangement could violate the Foreign Corrupt Practices Act.'
'It is unknown whether Adelson was aware of these warnings,' the story said.
In March last year, Las Vegas Sands Corp. disclosed a U.S. investigation into possible FCPA violations. The company received a subpoena from the SEC 'requesting documents relating to its compliance with the the Foreign Corrupt Practices Act.' The DOJ, it said, 'is conducting a similar investigation.'
In Asia, the company developed and owns the Marina Bay Sands in Singapore. In Macao it developed The Venetian Macao, The Sands Macao, The Plaza Macao, Four Seasons Hotel Macao, and most recently the Sands Cotai Central.
About 60% of the company's revenue comes from the Macau operations.
Las Vegas Sands said it believes the SEC subpoena was triggered by information from former U.S. CEO, Steven C. Jacobs. He sued the company and Adelson in 2010 ago in Nevada state court, alleging wrongful discharge and defamation, among other things.
From the Form 10-K filed last week by the Las Vegas Sands Corp. with the SEC, here's the FCPA disclosure:
On February 9, 2011, LVSC received a subpoena from the Securities and Exchange Commission (the “SEC”) requesting that the Company produce documents relating to its compliance with the Foreign Corrupt Practices Act (the “FCPA”). The Company has also been advised by the Department of Justice (the “DOJ”) that it is conducting a similar investigation. . . .
After the Company’s receipt of the subpoena from the SEC on February 9, 2011, the Board of Directors delegated to the Audit Committee, comprised of three independent members of the Board of Directors, the authority to investigate the matters raised in the SEC subpoena and related inquiry of the DOJ.
As part of the annual audit of the Company’s financial statements, the Audit Committee advised the Company and its independent accountants that it had reached certain preliminary findings, including that there were likely violations of the books and records and internal controls provisions of the FCPA and that in recent years, the Company has improved its practices with respect to books and records and internal controls.
Based on the information provided to management by the Audit Committee and its counsel, the Company believes, and the Audit Committee concurs, that the preliminary findings:
- do not have a material impact on the financial statements of the Company;
- do not warrant any restatement of the Company’s past financial statements; and
- do not represent a material weakness in the Company’s internal controls over financial reporting as of December 31, 2012.
The investigation by the Audit Committee, though largely completed, remains ongoing. The Company is cooperating with all investigations. Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter, the extent of materiality, or the range of reasonably possible loss, if any.