The ASIC v Bekier judgement: A wake-up call

A recent Federal Court ruling on the case of Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196 (Bekier Case) has sent a clear message across corporate Australia that director liability and personal executive accountability can arise when company leaders fail to meet their governance obligations.

That may come as no great surprise, but the ruling handed down in March 2026 is a stark reminder that good governance is not just a system — it is a personal responsibility.

Many now regard the Bekier Case as a corporate parable that will help shape governance practices, reporting frameworks and potentially change how ASIC approaches similar cases in the future.

The Bekier civil Case centred on evidence of serious activities being committed at Sydney’s The Star casino, owned and operated by The Star Entertainment Group Ltd (Star), including a failure to address money laundering risk that arose from Star’s dealings with gambling junket Suncity and its funder, underscoring the importance of anti-money laundering risk oversight.

The legal consequences of corporate governance breaches 

His Honour Justice Michael Lee found the company’s former chief executive, Matthias Bekier, and former general counsel, company secretary, and chief legal and risk officer, Paula Martin, breached their duties of care and diligence owed to Star under section 180(1) of the Corporations Act 2001.

In his 500-page ruling, Justice Lee found that while Star’s senior executives were aware of compliance and reputational risks, material information was inadequately escalated to the board, which exposed Star to regulatory, operational and reputational risks and highlighted individual executive accountability for risk failure.

 

"These cases are fact-specific, and the people who are nearly always in trouble on fact-specific claims are the executives because the facts land on the executives’ desks. If you are dealing with bad facts and tricky situations, you need to take extra care."

 

In June, the Federal Court ordered Bekier to pay a penalty of A$700,000 and disqualified him from managing corporations for six years. Martin was ordered to pay a penalty of A$400,000 and disqualified from managing corporations for seven years. Both were ordered to pay 45 per cent of ASIC’s costs, demonstrating the legal consequences of corporate governance breaches.

Earlier settlements had already been reached with The Star’s former chief casino officer, Greg Hawkins, who was ordered to pay a penalty of A$180,000 and disqualified from managing corporations for 18 months, and The Star’s former CFO Harry Theodore, who was ordered to pay a A$60,000 penalty and disqualified for nine months.

Mark Rigotti, managing director and CEO of the Australian Institute of Company Directors (AICD), says that while the Star judgement is significant, it does not reflect a wholesale shift in directors’ duties law. Rather, he says, it amplifies and clarifies existing governance expectations, especially around non-financial risk.

Rigotti says the Bekier Case highlights that boards must actively oversee non-financial risk, not merely receive reports or take a “tick and flick” approach.

“There was a reaffirmation of fundamental governance principles [in the ruling]. It is management’s job to do the running of the business, and it is the board’s job to oversee that and to have enough knowledge, interest and curiosity to do it well. Not be an absentee landlord.”

Anti-money laundering risk oversight for directors 

ASIC took the step to pursue not only Bekier and other senior executives, but Star’s entire board of non executive directors.

However, the regulator’s case against the company’s chairman and seven non executive directors was dismissed, with the court finding the board had been given incomplete information and that senior management had not escalated key risks.

Justice Lee effectively reaffirmed a long-standing principle that non-executive directors are entitled to rely on management, provided reliance is reasonable and no obvious red flags are present.

Dr Pamela Hanrahan, a prominent legal consultant and emeritus professor of commercial law and regulation at the University of New South Wales Business School, Sydney, says ASIC’s case against Star’s non-executive directors was hard to prove.

“These cases are highly fact-dependent, and you have to prove that a reasonable person in the non-executive director’s position would have done what it is alleged they ought to have done. In a universe of infinite possibility as to how people react in real time, that is difficult to prove,” she says.

“A lot of the interest in this case was whether Justice Lee would push that oversight principle further than it existed before — and he did not. However, he was critical of the way in which they behaved, even though he found ASIC did not make out the negligence case against them.”

Board papers: A major governance lesson

Hanrahan adds that a second big takeaway was around the complex process by which management communicates with boards.

“There is a lot of discussion in the judgement about the quality of the material and the disclosure that was passing from the management team to the board,” she says.

“The management team has the responsibility to identify issues and bring them to the attention of the board if they are material. What happened in this case was essentially a failure to appropriately identify the risks that ought to have been elevated to board level.

 

"The management team has the responsibility to identify issues and bring them to the attention of the board if they are material. What happened in this case was essentially a failure to appropriately identify the risks that ought to have been elevated to board level."

 

“It is a good opportunity for the executive team in particular, but the board as well, to ask whether they are satisfied with how well they are escalating and communicating risks between the management team and the board.”

On this point, Rigotti highlights board papers as a major governance lesson: boards need timely, targeted and manageable information and should set clear expectations for the papers they require.

He says that artificial intelligence tools may assist directors in managing information, but it cannot replace their responsibility to read, understand and act on board materials.

Paul Reidy, a partner at law firm Johnson Winter Slattery who acted for Harry Theodore in the case, says directors and executives need to be acutely aware of the risks attached to the industries in which they operate — especially when difficult factual circumstances arise.

“These cases are fact-specific, and the people who are nearly always in trouble on fact-specific claims are the executives because the facts land on the executives’ desks. If you are dealing with bad facts and tricky situations, you need to take extra care,” he says.

“If you are going to sit in a major corporate, on the board, whether you are an executive or a non-executive, you need to have a moral compass and a very good sense of right and wrong.” 

 

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