Australia | 2:12 PM
This story features STAR ENTERTAINMENT GROUP LIMITED, and other companies.
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Recent court decisions and actions undertaken by ASIC signal a definitive end to corporate complacency regarding regulatory risk in Australia.
By Valery Prihartono
This story features THE STAR ENTERTAINMENT GROUP, PLATINUM ASSET MANAGEMENT, and regulatory developments affecting director duties, criminal enforcement, and financial reporting obligations.
The Federal Court’s March 5 ruling in The Star Entertainment case provides the most significant judicial commentary on executive versus board liability in over a decade, while ASIC’s enforcement momentum continues with record jail sentences and aggressive director disqualifications.
- Star Entertainment CEO and Chief Legal Officer found liable for filtering critical risk information from the board
- Seven non-executive directors exonerated – entitled to rely on management absent dishonesty indicators
- Chris Marco receives a 14-year sentence, the highest ever from ASIC investigation
- Rodney Forrest (Platinum) was sentenced to 6 years for insider trading, following a 16-month investigation
- ASIC is pursuing the wind-up of Liberty Bell Bay for the four years of missing financial reports
The Star Judgment: Where Executive Liability Begins and Board Protection Ends
The Federal Court’s March 5, 2026, ruling in Australian Securities and Investments Commission v Bekier provides definitive guidance on director and officer duties under section 180(1) of the Corporations Act, drawing a clear distinction between executive accountability and board oversight limits.
The case targeted eleven former directors and officers of The Star Entertainment Group ((SGR)) regarding handling of anti-money laundering and counter-terrorism financing risks associated with dealings with Asian gambling junkets, specifically the Suncity Group.
The judgment’s outcome –finding former CEO Matthias Bekier and former Chief Legal and Risk Officer Paula Martin liable while exonerating seven non-executive directors– establishes the modern framework for corporate accountability in Australia.
Executive Liability: The Information Filter Prohibition
Justice Lee’s judgment establishes that senior executives cannot act as filters preventing boards from exercising monitoring functions. Bekier’s liability centered on possessing “alarming information” about Suncity operations that indicated risks significantly higher than what was being reported to the board.
The court found Bekier synthesized information –particularly regarding Suncity’s operations in Salon 95– demonstrating the casino’s AML/CTF programs were inadequate.
AML/CTF programs are written, risk-based compliance programs that set out how a regulated business will prevent its products or services being used for money laundering or terrorism financing.
Despite possessing this knowledge, Bekier failed to alert directors that board papers were deficient, effectively acting as an impermissible filter preventing the board from discharging its oversight obligations.
The Chief Legal Officer’s Indivisible Duty
Paula Martin’s liability carries particular significance for professionals holding dual roles as legal counsel and risk officers. Martin argued her roles as Company Secretary, Chief Legal and Risk Officer, and General Counsel were divisible, with distinct duty boundaries.
The court rejected this “compartmentalisation” defense, reinforcing an officer’s duty of care encompasses all their responsibilities and the entirety of their professional expertise. Martin was found to have breached duties by:
- Failing to ensure material risks were brought to the board’s attention
- Permitting misleading communications to the National Australia Bank ((NAB)) regarding the use of the China Union Pay card
- Allowing over $900m to be obtained by Star customers using CUP cards in a manner disguising gambling transactions as hotel expenses — a practice prohibited by China Union Pay
Martin’s failure to correct misrepresentations to the bank between 2013 and 2019 constituted “serious contravention” of statutory duties.
Non-Executive Director Protection: The Legitimate Reliance Shield
While findings against management were severe, the court’s dismissal of cases against seven former non-executive directors provides critical guidance on board liability boundaries.
ASIC argued directors breached duties by failing to treat credit limit resolutions as checkpoints to interrogate the casino’s continued dealings with high-risk junket operators. The regulator essentially contended directors should have looked past management-provided information to uncover underlying risks.
Justice Lee rejected this approach, characterizing ASIC’s case as “clouded by hindsight”. The judgment re-affirmed non-executive directors are entitled to rely on management to report problems or irregularities, provided no reason exists to believe management is dishonest, untrustworthy, or incompetent.
The court found management engaged in “dramatic understatement” of risks in materials provided to the board. Because information received by NEDs was insufficient to trigger reasonable inquiry, they were not in breach for failing to act on information they didn’t possess.
The Business Judgment Rule Clarification
The judgment also clarified the application of the Business Judgment Rule under section 180(2). Bekier attempted to invoke this rule, arguing his actions represented conscious management of commercial interests.
The court rejected this, emphasising the rule only protects officers who have made “conscious decisions” and informed themselves to the extent they reasonably believe appropriate.
Failure to act due to neglect or failure to consider a matter doesn’t constitute “judgment” in the statutory sense.
Investment Implications: The Governance Quality Framework
The Star judgment creates an actionable framework for investors evaluating governance risk:
Executive Turnover as Red Flag: Companies experiencing frequent senior executive departures –particularly Chief Risk Officers or Chief Legal Officers– may indicate executives facing pressure to withhold information from boards or disagreeing with risk management approaches.
Board Independence and Active Oversight: While Star’s board was exonerated, Justice Lee noted evidence didn’t present “a portrait of directors actively pressing management with difficult questions”. Boards demonstrating healthy skepticism and challenging management deserve premium valuations.
Information Flow Quality: The critical distinction was information quality reaching the board. Companies must demonstrate board papers provide complete, accurate risk assessments rather than filtered summaries that management wants directors to see.
Dual-Role Professional Risk: The finding against Martin establishes that lawyers, compliance officers, and risk managers cannot compartmentalise duties. Their obligation to the company overrides reporting line constraints.
For The Star specifically, the judgment creates ongoing governance reconstruction challenges. The company must rebuild board-management trust while continuing to operate under heightened regulatory supervision from gaming authorities.
Criminal Enforcement Acceleration: Record Sentences
ASIC’s criminal enforcement velocity has accelerated dramatically, with investigations moving from detection to sentencing far more rapidly than historical timelines.
Chris Marco: 14-Year Record Sentence
Western Australian fraudster Chris Marco received a 14-year imprisonment sentence in the Supreme Court of Western Australia — the highest prison sentence ever imposed for an ASIC criminal investigation.
Marco was found guilty of 43 counts of fraud totaling more than $34m. Operating an unregistered managed investment scheme, Marco built investor trust over the years before systematically misappropriating funds.
The sentence –with a 12-year non-parole period– signals judicial hardening toward large-scale financial fraud, eroding system trust.
While subject to appeal, the sentence establishes a new benchmark for fraud severity recognition.
Rodney Forrest: Platinum Insider Trading
Former Platinum Asset Management ((PTM)) investment manager Rodney Forrest was sentenced in January 2026 to six years’ imprisonment for insider trading and procuring others to trade in more than $3m of shares.
The case demonstrates ASIC’s new specialist insider trading team’s capabilities. The investigation was completed and finalised within 16 months of the offending; a significant improvement over multi-year timelines traditionally associated with such cases.
Forrest gained unauthorised access to the chairman’s computer, photographing confidential documents regarding a takeover proposal. He then used this inside information to trade personally and tip off others, even leaking takeover details to the media to drive price movement.
Upon public release of the proposal, shares jumped 12.5%. Justice Bromwich described the offending as “serious and pernicious”, noting it was a “profound breach of trust”.
Forrest was ordered to forfeit illegal profits of $309,571 and won’t be eligible for parole until 2029.
The 16-Month Investigation Velocity
The Forrest case’s 16-month timeline from offense to sentencing represents a material shift in enforcement velocity:
Detection Capability: ASIC’s systems now rapidly identify suspicious trading patterns around material corporate events
Evidence Gathering: Improved warrant processes and technology access enable faster evidence compilation
Prosecution Efficiency: Specialist teams build prosecution-ready cases without extended preparation periods
Guilty Plea Incentives: Rapid case development encourages guilty pleas, avoiding extended trials
For corporate insiders and investment professionals, the message is clear: the time from misconduct to imprisonment has compressed dramatically, materially elevating detection risk and deterrence effect.
Remedy Housing: Targeting Vulnerable Communities
The March 11, 2026, sentencing of Brent Smith, Mahmoud Khodr, and Fue Mano in the County Court of Victoria addressed particularly predatory fraud targeting Pacific Islander communities.
Operating through Remedy Housing, the group promoted “interest-free mortgages” to consumers between 2019 and 2021. The scheme attracted $1.83m in deposits from approximately 107 customers who were told that paying deposits of at least $10,000 would secure interest-free mortgages within twelve months, supposedly funded by overseas investors.
In reality, no investors existed, and no mortgages were ever provided. Smith and Khodr misappropriated over $750,000 for personal use or the operation. Judge Claire Quin described it as a “sophisticated scheme that targeted vulnerable customers”.
Smith was sentenced to six years and two months, Khodr to five years, and Mano to thirty months. Reparation orders were made to return stolen funds to victims.
Director Disqualification Intensifies
ASIC has aggressively deployed section 206F powers to remove recidivist directors from corporate management, targeting corporate phoenixing and creditor protection.
Claudio Criniti: $8m Debt Trail
On March 4, 2026, ASIC announced a five-year disqualification of Claudio Criniti following his involvement in the failure of seven companies between April 2023 and September 2024.
The companies – including Lamio Masonry Contractors and Reliance Food Pty Ltd – owed over $8m to creditors:
- $2.6m to the Australian Taxation Office
- $466,288 to Revenue NSW
- $434,151 to Workers Compensation Nominal Insurer
- $4.8m to trade creditors, including nearly $300,000 in wages and superannuation
ASIC found Criniti failed to ensure companies didn’t trade while insolvent, failed to maintain adequate books and records, and failed to provide reasonable assistance to liquidators — a common pattern among directors obstructing winding-up processes.
The five-year ban –maximum period allowed under section 206F– reflects ASIC’s assessment that Criniti represents a high risk to the public and the tax system.
Kylie Jane Campbell: Property Trust Account Malfeasance
In late February 2026, ASIC disqualified Port Melbourne property developer Kylie Jane Campbell for five years following the collapse of three companies: Englobo Group Holdings, Agritrade Fund, and Entertainment Group.
These companies failed owing $4.55m, with $3.3m owed to twenty-one unsecured trade creditors.
Campbell’s case is particularly notable because it combines corporate failure with prior criminal conduct. In 2022, Campbell was convicted in Melbourne County Court of causing a deficiency in her company’s trust account and wrongful conversion of funds.
She had misappropriated over $100,000 from a BSM Realty trust account to pay a deposit on personal property and transferred additional funds into her personal account. She received a three-year community corrections order and was ordered to repay $94,000 to the Victorian Property Fund.
ASIC’s 2026 disqualification was based on findings she didn’t understand her duties as a director and failed to ensure companies complied with tax and reporting obligations.
The combination of criminal malfeasance and corporate negligence resulted in removal from corporate life until 2031.
Financial Reporting Enforcement: The Liberty Bell Bay Wind-Up
On March 6, 2026, ASIC filed an application in the Supreme Court of New South Wales to wind up Liberty Bell Bay Pty Ltd, a significant entity within Sanjeev Gupta’s GFG Alliance focusing on steel, aluminum, and energy.
Four Years of Missing Reports
The application follows Liberty Bell Bay’s repeated failure to lodge annual financial reports for 2021, 2022, 2023, and 2024. Despite ASIC obtaining court orders in June 2025 to enforce compliance, the company failed to produce reports. ASIC alleges reports for the 2025 financial year are also outstanding.
Under Australian law, large proprietary companies –those with consolidated revenue over $50m, assets over $25m, or more than 100 employees– must lodge financial reports within four months of financial year end.
Wind-Up as Transparency Enforcement
ASIC’s pursuit of wind-up orders rather than merely penalties represents a strategic escalation. The regulator is establishing that corporate privilege of limited liability is contingent upon statutory transparency obligations.
The failure of large entities to report prevents informed decision-making by creditors and markets dealing with the company.
When companies systematically refuse to meet reporting obligations despite court orders, ASIC will pursue a wind-up on “just and equitable” grounds.
Investment Implications for Unlisted Subsidiaries
The Liberty Bell Bay case carries implications for listed companies with material unlisted subsidiaries or holdings:
Reporting Compliance Matters: Listed parent companies should verify unlisted subsidiary compliance with reporting obligations. Non-compliance creates regulatory risk extending to parent entities.
Transparency as License to Operate: The wind-up pursuit establishes that continued corporate existence depends on meeting transparency obligations, not merely paying penalties for non-compliance.
GFG Alliance Context: GFG Alliance’s Australian operations include Whyalla Steelworks and Tahmoor Coal, with several subsidiaries having faced external administration.
The Liberty Bell Bay action indicates broader scrutiny of the group’s Australian reporting compliance.
License Cancellations: The CSLR Connection
ASIC is increasingly canceling licenses linked to Compensation Scheme of Last Resort (CSLR) payments, establishing that firms generating customer compensation claims through misconduct are unfit to continue operating.
Private Wealth Cancellation
In February 2026, ASIC canceled the Australian Financial Services license of Private Wealth Pty Ltd following two compensation payments made by the CSLR.
The CSLR provides up to $150,000 to consumers with unpaid AFCA determinations, usually due to firm insolvency.
The cancellation reflects a new regulatory loop: where firm misconduct results in CSLR payouts, that firm is deemed unfit to continue holding licenses.
This ensures the scheme –funded by industry levies– isn’t used to subsidise the continued operation of insolvent or high-risk entities.
John Adicho ACL Cancellation
In March 2026, ASIC canceled the Australian Credit License of Sydney-based licensee John Adicho for multiple administrative failures:
- Failed to lodge six annual compliance certificates
- Expelled from the Australian Financial Complaints Authority for non-payment of fees
- Failed to pay industry funding levies
Under the National Consumer Credit Protection Act 2009, ASIC can cancel licenses if entities fail to pay levies after twelve months or don’t maintain AFCA membership.
Emerging Threats: AI, Personal Loan Fraud, and Gen Z Targeting
ASIC and ACCC have intensified warnings regarding evolving fraud patterns leveraging technology and targeting demographic vulnerabilities.
Personal Loan Fraud Surge
In March 2026, major alerts were issued regarding scammers posing as legitimate personal loan brokers.
These fraudsters create sophisticated websites and social media ads offering personal loans to those in financial hardship.
Once victims apply, they’re asked to provide bank login details, photo ID, and payslips; information then used for identity theft. Key red flags include:
- Requests for “payment protection insurance” or “loan establishment fees” upfront before fund release
- Quoting real ABN and credit license details of legitimate firms found on ASIC registers to appear genuine
AI Tools and Gen Z Financial Decision-Making
Research released in March 2026 shows one in five Gen Zs are using AI platforms for financial advice, while nearly two-thirds rely on social media.
ASIC has urged young investors to “sense-check” information they receive, highlighting automated tools often lack context and can perpetuate riskier financial decisions without safeguards provided by licensed human advisers.
The regulator’s Moneysmart website has launched refreshed guidance specifically helping consumers navigate the intersection of AI and personal finance.
Strategic Priorities: Audit Quality and Sustainability Reporting
Deputy Chair Sarah Court’s March 20, 2026, Parliamentary Committee statement elaborated ASIC’s strategic direction for 2026.
Audit Surveillance Expansion
ASIC is significantly expanding its audit surveillance program, increasing from fifteen file reviews in 2024-25 to twenty-five in 2025-26.
This expansion focuses on auditors’ critical role in examining financial reports, ensuring they provide a “true and fair view” of entity performance.
Sustainability Reporting Oversight
A major new frontier is the surveillance of mandatory sustainability reports.
As companies begin lodging these reports, ASIC intends to take a “pragmatic and proportionate approach” in the early years but has made clear that sustainability reporting will eventually be held to the same standards as financial reporting.
The regulator is already investigating eighteen companies that agreed to change financial reports to address inadequate disclosure of material business risks.
Procedural Victory: Sunshine Loans High Court Ruling
The High Court’s March 18, 2026 unanimous (7-0) ruling in the Sunshine Loans case has strengthened ASIC’s ability to pursue civil penalties without disruption.
Sunshine Loans attempted to force the trial judge to recuse himself from the penalty phase, arguing the judge’s earlier findings that their director was “not credible” indicated apprehension of bias.
The High Court ruled judges are not required to put aside credibility findings when moving to the second stage of civil penalty proceedings.
This decision provides essential certainty, ensuring enforcement actions aren’t “derailed by unfounded claims of apprehended bias”.
Investment Strategy: Navigating the Accountability Era
The March 2026 developments signal a definitive end to corporate complacency regarding regulatory risk.
The Star judgment, criminal sentences, director disqualifications, and reporting enforcement create a clear framework for investment positioning.
Favor Active Board Oversight
Companies demonstrating boards that actively challenge management, seek independent verification, and maintain healthy skepticism deserve premium valuations.
The Star case demonstrates passive boards –even if legally protected when misinformed– create elevated risk.
Look for evidence of:
- Board minutes showing probing questions and challenges to management
- Independent expert engagement when appropriate
- Voluntary disclosure of near-misses and emerging risks
- Management turnover stability, particularly in risk and compliance roles
Discount Information Flow Deficiencies
Companies with recent senior executive departures in risk, compliance, or legal functions face an elevated risk that information filtering may be occurring.
The Star case establishes that executives withholding material information from boards face personal liability.
Red flags include:
- Frequent Chief Risk Officer or Chief Legal Officer turnover
- Whistleblower complaints about risk escalation barriers
- Regulatory actions revealing boards were unaware of material risks
- Board composition lacks independent members with relevant expertise
Monitor Criminal Enforcement Velocity
The 16-month Forrest investigation timeline demonstrates ASIC’s enhanced capability to rapidly move from detection to sentencing.
Investment professionals and corporate insiders face materially elevated detection risk.
Companies should demonstrate:
- Robust personal trading policies for employees with access to material non-public information
- Active monitoring and surveillance of employee and related party transactions
- Clear escalation procedures when material information is obtained
- Board oversight of insider trading risk management
Assess Unlisted Subsidiary Compliance
The Liberty Bell Bay wind-up application demonstrates that unlisted subsidiary reporting failures create material regulatory risk for corporate groups.
Listed companies with significant unlisted operations require scrutiny around:
- Subsidiary financial reporting compliance and timeliness
- Parent company verification procedures ensuring subsidiary compliance
- Disclosure of any subsidiary reporting delays or court orders
- Group reporting transparency enabling stakeholder assessment
Financial Services License Quality
The Private Wealth cancellation and Adicho license removal demonstrate ASIC is using license cancellation aggressively for firms generating CSLR compensation claims or failing basic administrative obligations.
For investors in wealth management platforms and financial advice networks, assess:
- CSLR payment history and potential exposures
- AFCA determination volumes and amounts
- Compliance certificate lodgment track records
- Industry funding levy payment status
Conclusion: The Personal Accountability Regime
The March 2026 regulatory landscape confirms Australia has entered a personal accountability era where:
Executives Cannot Filter Information: The Star judgment establishes that management must ensure boards receive complete, accurate risk information. Filtering creates personal liability.
Criminal Enforcement Has Accelerated: The 16-month Forrest investigation and 14-year Marco sentence demonstrate a rapid pathway from misconduct to imprisonment.
Director Disqualifications Target Recidivists: Maximum five-year bans are being applied to directors leaving trails of insolvent companies and unpaid creditors.
Transparency Is Mandatory: The Liberty Bell Bay wind-up pursuit establishes that reporting obligations aren’t optional regardless of company size or ownership structure.
License Cancellation Follows Misconduct: Firms generating CSLR compensation claims or failing basic compliance lose operating licenses.
For investors, these developments create a clear framework: governance quality and transparency have become primary valuation drivers.
Companies with robust information flows, stable executive teams, active board oversight, and proactive compliance cultures deserve premium valuations relative to peers treating governance as a minimal obligation.
The regulatory message is unambiguous: transparency is mandatory, accountability is personal, and the path from misconduct to incarceration is shorter than ever.
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