The Federal Court’s recent decisions in ASIC v Bekier [2026] FCA 196 and ASIC v Bekier (Penalty Judgment) [2026] FCA 756 have put the duties of general counsel and company secretaries under sharp scrutiny. The cases arose from cascading governance failures at The Star Entertainment Group and resulted in findings that its CEO, Matthias Bekier, and its General Counsel and Company Secretary, Paula Martin, each breached their duties of care and diligence under section 180(1) of the Corporations Act 2001 (Cth).
The decisions illustrate how the same statutory obligation plays out differently depending on the information a person holds, the role they occupy, and the moment at which they are required to act.
What went wrong
The case centred on information that both Bekier and Martin accumulated over time about serious money laundering and criminal activity risks associated with Star’s dealings with junket operator Suncity, conduct in its private gaming room Salon 95, and the misleading use of China UnionPay (CUP) cards in a way that deceived Star’s banking partner, NAB.
Justice Lee found that both had received and appreciated this information, and that a reasonable person in their positions would have escalated the matters to the Board and recommended suspension or termination of Star’s relationships with Suncity and two of its gambling customers.
Bekier’s explanation — that the COVID-19 pandemic had consumed his attention when the NAB issue arose — was acknowledged but did not excuse him. A pandemic (or, by extension, other operational pressures) does not suspend a director’s obligation to attend to other material risks as they emerge.
Martin’s position was more serious. She had received a letter from NAB seeking confirmation that CUP card transactions did not include a gambling component. She instructed a junior solicitor to draft a response, reviewed it, and approved its sending, despite knowing the representation was false. She did not bring the matter to the Board. The Court rejected her argument that she had no obligation to act because others already held the same information, and that her reporting duties were limited to what the Board had specifically requested.
The GC’s dual role
For general counsel who hold additional corporate roles, the decision is especially important, standing for the proposition that a GC who also serves as company secretary (or in any other officer role) can reasonably be expected to identify and escalate risks that others in the organisation may not appreciate. Martin sought to separate her responsibilities as Company Secretary from her role as Group General Counsel and Chief Legal and Regulatory Officer. Justice Lee disagreed, finding that the statutory inquiry does not divide the capacities in which responsibilities are undertaken.
When escalation is not required
Importantly, not every receipt of adverse information triggers a duty to escalate. The Court found no breach where Bekier received an unverified report about a junket customer’s alleged money laundering history, given that Star’s legal team was aware, the regulator had not raised concerns, and the risk was not yet sufficiently material. This, contrasted with the findings of breach discussed above, shows that the Court’s assessment turns on what the officer knew, and the surrounding context, at the specific point of decision.
Consequences
The penalty judgment imposed disqualification orders of six and seven years on Bekier and Martin respectively, and pecuniary penalties of $700,000 and $400,000. Martin’s disqualification exceeded Bekier’s, based on the Court’s view that her legal training and governance responsibilities made her failures more serious, and that she had not demonstrated genuine insight into her wrongdoing. The Court also noted that, absent parity constraints arising from earlier settlements with other Star executives, both penalties would have been higher.
Key takeaways for in-house counsel
