Wynn Resorts has agreed to settle a shareholder lawsuit for $70 million, closing a chapter on the legal issues stemming from sexual misconduct allegations against its former CEO, Steve Wynn. The settlement addresses claims that the company misled investors by not disclosing the allegations, which led to a sharp drop in Wynn Resorts’ stock value in 2018.
The shareholders filed the lawsuit, stating that between March 28, 2016, and February 12, 2018, Wynn Resorts made public statements that didn’t reveal the misconduct allegations. When those accusations surfaced in early 2018, the company’s stock price fell dramatically, dropping from over $200 per share to around $80, where it currently trades.
Wynn Resorts itself will pay $9.4 million of the settlement, while insurers will cover the remaining amount. The specific compensation for each shareholder remains uncertain. “Each class member that files a valid proof of claim will receive their pro rata share of the net settlement fund,” said a representative from Pomerantz LLP, the law firm representing the shareholders.
The lawsuit follows a series of legal and regulatory issues for Wynn Resorts after Steve Wynn resigned in 2018. A Wall Street Journal report had exposed a pattern of sexual misconduct, leading to investigations by both the Nevada Gaming Control Board and the Massachusetts Gaming Commission. Wynn Resorts paid significant fines—$20 million to Nevada regulators and $35 million to Massachusetts authorities.
In a statement to the Las Vegas Review-Journal, Wynn Resorts said, “We are pleased to have resolved this long-standing legal matter through a settlement which we believe is advantageous for the company.” The company indicated that this settlement marks the final legal matter tied to Steve Wynn’s actions.
This settlement is one of several legal issues the company has faced related to Wynn’s misconduct. Last year, Wynn Resorts resolved another lawsuit brought by nine women who accused Wynn of harassment while working at the Wynn Salon and Encore Salon. The terms of that settlement were not disclosed.
Murielle Steven Walsh, the lead attorney in the class-action lawsuit, highlighted the broader implications of the case. “This case should serve as a warning to corporations and their officers that talk is not, in fact, cheap,” Walsh said. “Investors care about corporate integrity and accountability, and companies that are accused of making statements to cover up or deny allegations of serious misconduct by executives face a potentially steep financial reckoning.”
Steve Wynn himself faced additional consequences beyond the lawsuit. He agreed to a $10 million settlement with Nevada regulators and was banned from holding any role in publicly traded companies overseen by the state. Since his departure, Wynn Resorts has been led by Matthew Maddox, who has worked to reform the company’s governance and distance it from its former CEO.
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