Vince McMahon will pay $1.7 million to settle SEC allegations over hush money agreements
The Securities and Exchange Commission said it has settled charges against former World Wrestling Entertainment mogul Vince McMahon for allegedly violating federal securities laws by failing to disclose a pair of settlement agreements to WWE worth $10.5 million.
The SEC said Friday that the settlement agreements, made in 2019 and 2022, were executed without the knowledge of WWE’s board, legal department, accountants or auditor and “circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements.”
“Company executives cannot enter into material agreements on behalf of the company they serve and withhold that information from the company’s control functions and auditor,” Thomas P. Smith Jr., associate director in the SEC’s New York regional office, said in a statement.
McMahon will pay over $1.7 million in a civil penalty and in reimbursement to WWE. McMahon agreed to the settlement without admitting or denying the agency’s findings.
“The case is closed. Today ends nearly three years of investigation by different governmental agencies,” McMahon posted on X. “There has been a great deal of speculation about what exactly the government was investigating and what the outcome would be. As today’s resolution shows, much of that speculation was misguided and misleading. In the end, there was never anything more to this than minor accounting errors with regard to some personal payments that I made several years ago while I was CEO of WWE. I’m thrilled that I can now put all this behind me.”
Throughout his controversial career, McMahon has faced odds and weathered various scandals while building the world’s largest professional wrestling operation.
According to the SEC, the settlement agreements required McMahon to pay $3 million to a former female employee and $7.5 million to a female contractor; in exchange they would not disclose their allegations of misconduct, relationship or file claims against McMahon or WWE.
The agency said WWE overstated its 2018 income by some 8% and its 2021 net income by about 1.7%
In 2022, an investigation by WWE’s board found that McMahon made at least $14.6 million in payments between 2006 and 2022 for “alleged misconduct,” according to regulatory filings.
The settlements were made to women, including WWE employees, who alleged that McMahon initiated unwanted sexual contact and coerced women into performing sexual acts; in one case a woman claimed that McMahon sent her unsolicited nude photos of himself, as first reported by the Wall Street Journal.
The allegations sparked investigations by the Justice Department and the SEC.
McMahon had issued statements denying the allegations. “I am confident that the government’s investigation will be resolved without any findings of wrongdoing,” McMahon said at the time in a statement to The Times.
Although McMahon denied the allegations that he had paid hush money to squash sexual misconduct claims, he stepped down from WWE in 2022. However, the following January he orchestrated his return as chairman.
On Monday, WWE “Raw” will stream exclusively on Netflix. The wrestling franchise is hoping for a huge global and multigenerational audience following years of success on TV and drama inside and outside the ring.
In April 2023, he agreed to merge WWE with the Ultimate Fighting Championship to form a new publicly traded company, TKO Group Holdings, worth $21.4 billion. The new entity launched that September. It is controlled by Endeavor Group, the entertainment giant headed by Hollywood power broker Ari Emanuel. McMahon stayed on as executive chairman of the board.
Within months, however, McMahon once against stepped down from the company after a former WWE employee, Janel Grant, sued the company, McMahon and former head of talent relations John Laurinaitis, alleging sexual assault, trafficking and emotional abuse. Grant claimed that McMahon agreed to pay her $3 million in exchange for her silence.
At the time of Grant’s suit, a spokesperson for McMahon said in a statement to The Times that her lawsuit was “replete with lies, obscene made-up instances that never occurred, and a vindictive distortion of the truth.”
“During his time leading WWE, Vince McMahon acted as if rules did not apply to him, and now we have confirmation that he repeatedly broke the law to cover up his horrifying behavior, including human trafficking,” Ann Callis, Grant’s attorney, said in a statement Friday. “The SEC’s charges prove that the NDA [nondisclosure agreement] Vince McMahon coerced Ms. Grant into signing violates the law, and therefore her case must be heard in court.”
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