Star Penalties Raise the Stakes for Directors

By Special Counsel Daniel Fullerton, Holding Redlich 

In June, the Federal Court handed down a penalty decision against two senior executives of the Star Entertainment Group (Star) in Australian Securities and Investments Commission (ASIC) v Bekier (Penalty Judgment) [2026] FCA 756.

Justice Michael Lee imposed a fine of $700,000 against the former CEO, Matthias Bekier, and disqualified him from managing corporations for six years. Former Group General Counsel and Company Secretary, Paula Martin, received a penalty of $400,000 and a seven-year ban. Both were ordered to pay 45% of ASIC’s legal costs.

The obligation to escalate risk

The sanctions followed findings by the Court that Mr Bekier and Ms Martin had contravened their duty under section 180(1) of the Corporations Act 2001 (Cth) to act with care and diligence in relation to repeated indicators of money laundering and criminal activity in Star’s private gaming salon. The Court decided that Mr Bekier possessed critical information concerning significant risks of money laundering, which he failed to act on by notifying the Board. Ms Martin was also found to have failed in her duty to escalate material legal and compliance risks to the Board, and that she could not separate her roles of Company Secretary and Group General Counsel to avoid liability as an officeholder.

Although ASIC had sought harsher punishments, Justice Lee applied lower sanctions to maintain parity with earlier settlements involving other former Star executives, observing that the penalties would otherwise have been substantially higher.

Deterrence, not punishment

In reaching the decision, the Court reaffirmed that the purpose of fines is primarily deterrence rather than retribution or moral condemnation, with Justice Lee noting that the aim of the measures was to deter future contraventions by the defendants and others in similar positions of responsibility.

There were several determining factors, including the seniority of Mr Bekier and Ms Martin, and that higher standards are expected of management operating in an inherently high-risk industry. Justice Lee noted that the contraventions occurred within a tightly regulated industry and that Star’s relationship with junket operators involved foreseeable risks that the defendants should have brought to the Board’s attention.

The Court also considered the absence of insight or contrition to be highly material, finding that neither defendant had demonstrated an appreciation of why their conduct was wrong. While they were entitled to defend the proceedings, the Court said they were not entitled to the benefit that may be recognised for those who accept liability, agree on the facts and spare the public the cost of a contested hearing.

The Court’s sanctions were more consistent with those typically imposed in cases involving intentional dishonesty, despite no finding of dishonesty in this instance. Although the measures were lower than those sought by ASIC, the decision sends a clear warning to directors and officers that significant penalties may be imposed even where misconduct stems from negligence rather than dishonesty.

Directors must remain engaged, maintain an active understanding of the organisation’s operations and risk profile, and ensure the Board receives clear, timely information. Those who adopt an inquiring mindset and ensure robust governance processes will be best placed to meet their obligations and manage personal risk.