It started as a simple wrongful termination dispute, but it has now escalated to a federal probe and possible criminal charges.
Documents filed in January by former Sands China CEO Steve Jacobs, which allege that he performed duties that might be considered illegal for the parent company, Las Vegas Sands, are apparently the basis for an investigation launched recently by the Securities and Exchange Commission. LV Sands announced last month that it received a subpoena on February 9 to provide information and that it will cooperate with the probe. Also last month, Nevada Gaming Control Board Chairman Mark Lipparelli said his agency was also looking into the allegations.
Jacobs, who was fired in July after disputes with LV Sands Chairman and CEO Sheldon Adelson, filed a wrongful termination suit, and recent court filings accused Adelson of forcing him to engage in illegal activity. LV Sands contends that Jacobs was undertaking those activities on his own with no knowledge of the parent company, calling Jacobs “a disgruntled former executive of a Macau company, Venetian Macao Limited, who was terminated by Venetian Macao Limited based upon a number of serious breaches of his fiduciary obligations.”
LV Sands President and COO Michael Leven said he believes the SEC investigation was spurred by Jacobs’ court filings.
“If you read the subpoena, it looks like it was almost directly from the allegations made on that lawsuit,” Leven told the Macau Daily Times. “There are some other mentions on the subpoena about triads and things like that, but we think that’s cover. We assume this, because the SEC does not tell what they are investigating.”
Leven said that Sands China has “filed a criminal complaint in Macau for defamation and with evidence of extortion, which complicates Mr. Jacobs’ situation.” He said the charges were filed on January 21.
Despite the SEC and Nevada investigations, Leven says the Macau authorities are not involved.
“Nothing is going on in Macau,” Leven told the Daily Times. “We met with government officials, who have indicated to Mr. Adelson they support his position. I’m comfortable on this with any local officials.”