Tuesday, September 18, 2012
By Peter Henderson
SAN FRANCISCO | Fri Sep 14, 2012 4:34pm EDT
(Reuters) - Las Vegas Sands (LVS.N) deceived a Nevada court in an attempt to stall a lawsuit by the former head of its Macau operations, a state judge ruled on Friday, fining the casino operator and abridging its right to object in a fight over key evidence.
The ruling gives former Sands China (1928.HK) Chief Executive Steve Jacobs new room to pursue his wrongful termination case, which has become a public fight over the leadership and business methods used by Sands Chief Executive Sheldon Adelson.
Adelson is a prominent Republican Party donor, as well as one of the richest men in the world, who led U.S. casinos into Macau, a gambling market which dwarfs Las Vegas.
Jacobs contends Adelson directed him to investigate officials in the Chinese gambling haven for information to use against them and that Adelson told him to hire a Macau government official in a potential conflict of U.S. anti-bribery law.
The U.S. Department of Justice, Securities and Exchange Commission and Nevada casino regulators have all launched investigations in the wake of Jacobs' charges.
Sands has denied Jacobs' claims and says the former executive exceeded his authority and conducted "improper acts" before he was fired in 2010, the year after he was hired.
At issue are emails and other electronic data sought by Jacobs. Sands China, a subsidiary of U.S.-based Las Vegas Sands Corp, told the court the data could not be removed from Macau due to a local data protection law.
"The transferred data had already been copied; the copy removed from Macau; and reviewed in Las Vegas by representatives of Las Vegas Sands," District Court Judge Elizabeth Gonzalez wrote in a ruling published on Friday.
Sands' repeated inaccurate statements over several months showed an intention to deceive the court, and the purpose appeared to be to stall the discovery process, she wrote.
"The Defendants concealed the existence of the transferred data from this Court," she concluded.
As punishment, she said the casino company could not use the Macau data privacy law as a defense against producing documents, a clear procedural win for the fired executive.
She also fined Sands $25,000 and some plaintiff's attorney fees. The ruling came after three days of testimony this week.
Neither Sands nor Jacobs' attorney immediately responded to a request for comment.
(Reporting By Peter Henderson in San Francisco and Timothy Pratt in Las Vegas; Editing by Richard Chang)