Las Vegas Sands Corp. said Friday that an internal investigation by its Audit Committee found ‘likely violations of the books and records and internal controls provisions of the FCPA.’ But after improvements, the company’s internal controls now have no ‘material weakness.’
The DOJ and SEC are investigating the Sands. The company believes the investigations were triggered by allegations in a wrongful-termination lawsuit filed against the company in 2010 by Steven C. Jacobs, the former CEO of Sands’ China affiliate.
A story published last year by ProPublica and PBS’ Frontline cited internal documents about a payment of $700,000 in legal fees to a Macau legislator whose law firm was an outside counsel to Las Vegas Sands.
In 2011, the SEC issued a subpoena to the Sands requesting documents relating to its FCPA compliance.
The investigations are continuing and the Sands can’t predict the outcome.
Here’s the latest disclosure by Las Vegas Sands Corp from its Form 10-Q filed with the SEC on May 10:
After the Company’s receipt of the subpoena from the SEC on February 9, 2011, the Board of Directors delegated to the Audit Committee, comprised of three independent members of the Board of Directors, the authority to investigate the matters raised in the SEC subpoena and related inquiry of the DOJ.
As part of the annual audit of the Company’s financial statements, the Audit Committee advised the Company and its independent accountants that it had reached certain preliminary findings, including that there were likely violations of the books and records and internal controls provisions of the FCPA and that in recent years, the Company has improved its practices with respect to books and records and internal controls.
Based on the information provided to management by the Audit Committee and its counsel, the Company believes, and the Audit Committee concurs, that the preliminary findings:
- do not have a material impact on the financial statements of the Company;
- do not warrant any restatement of the Company’s past financial statements;
- and do not represent a material weakness in the Company’s internal controls over financial reporting as of March 31, 2013.
The investigation by the Audit Committee, though largely completed, remains ongoing. The Company is cooperating with all investigations.
Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter, the extent of materiality, or the range of reasonably possible loss, if any.
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