Crown Resorts has reached a $94 million settlement in a class action lawsuit filed by investors. The lawsuit, initiated in December 2017, alleged that Crown concealed the true scope of its marketing activities in China. This culminated in the 2016 arrest of 18 Crown employees in China for these very actions, causing the company’s share value to plummet by nearly 14%. Investors contended that Crown’s lack of openness regarding its high-risk Chinese operations directly led to their financial setbacks. The legal firm representing the investors, Maurice Blackburn, was blunt at the time, asserting that Crown’s attempt to lure high-stakes gamblers in China had dramatically backfired when the Chinese government took action against unlawful gambling operations. Although the settlement awaits final authorization from the Federal Court, it suggests a possible conclusion to a turbulent period for Crown Resorts. The company, in a public statement, conveyed its expectation of recouping a substantial portion of the settlement sum from its insurance providers. Nevertheless, the ultimate resolution of these discussions remains unclear.
The management team concluded that the agreement represented the most favorable course of action for the firm and its investors.
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