The Federal Court has cleared seven former non-executive directors of The Star Entertainment Group of failing their duties, ending a long effort by the corporate regulator to pin the casino's near-collapse on its highest overseers. The ruling found that because senior staff hid money laundering risks and shady junket deals from the board, the directors had no reason to dig deeper or act. While the boardroom escaped, two top executives were found to have breached the Corporations Act by keeping their bosses in the dark about a KPMG report on process failures and the criminal associations of gambling middlemen.
"Longo says corporate boards are now on notice despite the regulator’s defeat… Justice Michael Lee’s judgment has helped to clarify the role of corporate boards and spelt out to directors what is expected of them."
ASIC Chairman Joe Longo, facing the end of his term, maintains the defeat is a win for "clarity." He argues the judgment serves as a manual for what directors must do, even though the court decided these specific directors did nothing wrong. The watchdog still has an "appetite" for suing boards, provided the paperwork looks solid, but the Star Entertainment outcome suggests a high wall for proving what a director "should" have known when subordinates are silent.
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The Penalties Paid by the Inner Circle
While the board walked, the managers who handled the daily grind of the casino's Suncity relationship and "Salon 95" operations faced bans and fines.
| Individual | Role | Outcome | Reason |
|---|---|---|---|
| Matt Bekier | Former CEO | Found Liable | Failed to handle KPMG risk report; kept info from Board. |
| Paula Martin | Former Co-Sec / Counsel | Found Liable | Failed to escalate money laundering red flags. |
| Gregory Hawkins | Former Chief Casino Officer | $180,000 Fine / 18-mo Ban | Approved junket deals knowing law-break risks. |
| Harry Theodore | Former CFO | $60,000 Fine / 9-mo Ban | Admitted to misleading bank representations. |
The Mechanics of Ignorance
The court’s logic creates a curious loop for Corporate Governance.
If a CEO does not "appropriately escalate" a problem, the board remains "un-notified."
Without notification, the board has no "duty to inquire" into that specific rot.
Therefore, the board is safe because it was poorly informed.
Justice Michael Lee noted that the board members were not required to hunt for ghosts they weren't told existed. This leaves the Federal Court in a position where it penalizes the "liars" but lets the "blind" stay in power. Longo's claim that boards are "on notice" implies that they should now be more suspicious of their own staff, though the legal reality is that being lied to remains a sturdy defense.
Background: A Casino on the Brink
The saga began with revelations of massive failures in stopping dirty money from moving through Star’s Sydney casino. ASIC launched its "marathon" legal claim against 11 former leaders in late 2022.
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In February 2025, Theodore and Hawkins settled, admitting they let the Suncity junket run a private room (Salon 95) despite media reports of criminal ties.
Matt Bekier and Paula Martin fought the charges but were found by the court to have breached their duties in early 2026.
The seven non-executive directors—the "outsiders" meant to watch the "insiders"—were the final group to be cleared, leaving ASIC with a record of hitting the mid-level but missing the top of the pyramid.