Wynn Resorts has agreed to a $70 million settlement in a class-action lawsuit filed by shareholders, who accused the company of failing to disclose sexual misconduct allegations against its former CEO, Steve Wynn. The shareholders claim the company’s stock value plummeted after the misconduct allegations came to light in 2018.
The settlement resolves claims brought by shareholders who allege that Wynn Resorts made misleading statements between March 28, 2016, and February 12, 2018, regarding the misconduct of its founder. The company’s stock price dropped sharply from over $200 per share in early 2018 to around $80, where it trades today.
Wynn Resorts will cover $9.4 million of the settlement, while insurers will pay the remaining amount. The precise payout for individual shareholders remains unclear. “Each class member that files a valid proof of claim will receive their pro rata share of the net settlement fund,” said a representative of law firm Pomerantz LLP, which represented the shareholders.
The lawsuit follows years of fallout from the allegations against Steve Wynn. The former CEO resigned in 2018 after a Wall Street Journal report revealed a pattern of sexual misconduct. Following the revelations, Wynn Resorts faced investigations by both the Nevada Gaming Control Board and the Massachusetts Gaming Commission. The company was fined $20 million by Nevada regulators and an additional $35 million by Massachusetts.
“We are pleased to have resolved this long-standing legal matter through a settlement which we believe is advantageous for the company,” Wynn Resorts told Las Vegas Review-Journal. The company noted that the settlement closes the final legal chapter related to Steve Wynn’s misconduct.
The settlement is part of a broader effort to address the impact of Wynn’s actions on the company. Last year, Wynn Resorts settled a separate class-action lawsuit filed by nine women, who accused Wynn of harassment during their employment at the Wynn Salon and Encore Salon. The settlement amount was undisclosed.
Murielle Steven Walsh, lead attorney in the class-action securities lawsuit, emphasized 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 told LVRJ. “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.”
The fallout also led to Steve Wynn paying a $10 million settlement to Nevada regulators and his ban from holding any role in publicly traded companies under the state’s jurisdiction. Wynn Resorts’ subsequent leadership, led by Matthew Maddox, has worked to distance itself from its founder and ensure compliance with new corporate governance standards.
Original article: https://www.yogonet.com/international/noticias/2024/09/20/79330-wynn-resorts-settles-shareholder-lawsuit-over-ceo-misconduct-coverup-for-70-million
