Steve Wynn Lawsuit to Proceed, Wynn Resorts Shareholders Have Case
Posted on: August 5, 2021, 08:44h.
Last updated on: August 5, 2021, 09:16h.
Steve Wynn, 79, exited the gaming industry more than three years ago, but his legal affairs remain ongoing in Las Vegas.
A federal judge this week revived a formerly dismissed case against Wynn Resorts brought by shareholders, arguing that the illegal actions committed by Steve Wynn and company executives led to a devaluation of the company’s stock price. US District Judge Andrew Gordon will allow the shareholder lawsuit to proceed on allegations that Wynn Resorts violated US Securities and Exchange Commission laws and regulations through “material misrepresentations and omissions.”
Steve Wynn is named as a defendant in the case.
Attorneys representing the plaintiffs say the failure among Wynn Resorts brass to disclose alleged sexual misconduct by the company’s namesake founder, chairman, and CEO in the years prior to the career-ending expose on Steve Wynn published in The Wall Street Journal wronged shareholders.
The court’s decision underscores the fact that alleged sexual misconduct and harassment by corporate executives are material issues for investors, especially when management turns a blind eye to reports of wrongdoing,” said Murielle Steven Walsh, an attorney for the plaintiffs. “This type of misconduct poses a threat to a company’s financial success.”
Steve Wynn continues to maintain that he never acted inappropriately with female employees.
The WSJ bombshell report in early 2018 claimed that Steve Wynn repeatedly took advantage of his power by way of harassing and assaulting women who worked for the casino business. From forcing spa employees to perform sexual acts, to paying a woman $7.5 million to keep quiet regarding a potential paternity claim against the casino mogul, the allegations were aplenty.
The WSJ article was published on January 27, 2018. Wynn Resorts shares closed the previous trading day at $180.29. With the allegations against Mr. Wynn publicized, shares over the next month slid to $163.06 — a 9.5 percent drop.
In his 42-page decision, Gordon said plaintiffs “sufficiently alleged” that Steve Wynn, current CEO Matt Maddox, and two former Wynn Resorts executives — Kim Sinatra, then-executive vice president and general counsel, and Stephen Cootey, then-chief financial officer — “were aware of information contradicting their statements that denied misconduct allegations.”
Gordon explained there’s sufficient reason to move the lawsuit forward on grounds that the Wynn Resorts executives denied publicly any knowledge of wrongdoing by Steve Wynn.
“The inference that these defendants were aware of Wynn’s alleged misconduct at the time of their statements is cogent and compelling,” Gordon wrote.
Wynn Resorts said in a statement that it is looking forward to proceeding with the case “beyond the allegation stage.” The company added to the Las Vegas Review-Journal that while it paid $20 million in Nevada fines and $35 million in Massachusetts fines to maintain their coveted gaming licenses, neither state regulator concluded that Wynn Resorts was unsuitable to conduct casino operations.
The plaintiffs’ lawsuit seeks unspecified damages for Wynn shares dropping as a result of the scandal.
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