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Crown Resorts faces class-action lawsuit over marketing campaign in China

Certain Crown Resorts Ltd. shareholders filed a class-action lawsuit against the company for allegedly failing to disclose a marketing campaign in China that caused a nearly 14% drop in its share price on Oct. 17, 2016, Reuters reported.

Shareholders, who invested in Crown between Feb. 6, 2015, and Oct. 16, 2016, engaged Maurice Blackburn Lawyers to launch the proceeding in the Federal Court of Australia, Crown said in a release, adding that it will "vigorously defend" itself in the proceeding.

The drop in the share price came following the arrest of about 20 Crown employees in China for marketing gambling trips to Macau. Gambling is legal in Macau but not in mainland China, Reuters noted in its Dec. 4 report.

Shareholders should have been informed of the risks in China and the threat they pose to Crown's revenue streams, Reuters quoted Andrew Watson, Maurice Blackburn's national head of class actions, as saying.

Detained employees have now been released, Reuters added.