US judge clears way for ex-employee's suit against Sands

PUBLISHED : Thursday, 17 March, 2011, 12:00am
UPDATED : Thursday, 17 March, 2011, 12:00am

Sheldon Adelson's Las Vegas Sands Corp must answer a controversial lawsuit brought by its former top executive in Macau, a US judge has ruled.

Judge Elizabeth Gonzalez of Las Vegas' Clark county district court on Tuesday rejected Las Vegas Sands' motion to dismiss the suit by Steven Jacobs, who served as chief executive of Hong Kong-listed Sands China and was fired in July last year.

Las Vegas Sands had argued that the suit should instead be heard in Macau, where its 70 per cent-owned Sands China unit operates the Venetian, Sands and Four Seasons casino resorts and is building a US$4 billion Cotai strip complex. The judge rejected the claim and scheduled a pre-trial conference for April 1.

Las Vegas Sands, the world's biggest casino operator by market value, said last month it was being investigated by the US Securities and Exchange Commission and the Department of Justice regarding its compliance with the Foreign Corrupt Practices Act (FCPA), which bans US entities from making payments to foreign government officials in order to win business or otherwise receive favourable treatment.

The company said it intended to co-operate with the investigations, which it believed stemmed from the Jacobs lawsuit. Last week, Reuters reported the Federal Bureau of Investigation had also launched a probe of the firm.

Jacobs sued Las Vegas Sands in October of last year seeking severance pay and stock options worth around US$10 million.

His lawsuit alleges he was fired 'without cause' last summer after resisting Adelson's 'repeated and outrageous demands' that he 'use improper 'leverage' against senior government officials of Macau' in order to win favourable treatment of Sands' development plans.

Adelson also allegedly demanded the company continue using the services of Macau attorney Leonel Alves, who is also a member of the city's Executive Council or local-level cabinet. This was allegedly despite Jacobs' concerns that employing Alves might risk violating provisions of the FCPA.

Las Vegas Sands' response, filed to the court in December, calls Jacobs a 'disgruntled former executive'.