“The Securities and Exchange Commission says that it has reached a settlement deal with former WWE CEO Vince McMahon relating to undisclosed payments to an employee and an independent contractor with whom he allegedly had relationships with. McMahon will pay a $400,000 civil penalty, and will reimburse the WWE more than $1.3 million. The SEC”, — write: www.hollywoodreporter.com
McMahon will pay a $400,000 civil penalty, and will reimburse the WWE more than $1.3 million.
The SEC charges stem from two settlement agreements McMahon made, one signed in 2019 and another in 2022. The agreements were made on behalf of himself and the company, but the SEC said that he did not disclose them to the WWE board. McMahon was CEO at the time.
Per the SEC, “one settlement agreement obligated McMahon to pay a former employee $3 million in exchange for the former employee’s agreement to not disclose her relationship with McMahon and her release of potential claims against WWE and McMahon, and the second agreement obligated McMahon to pay a former WWE independent contractor $7.5 million in exchange for the independent contractor’s agreement to not disclose her allegations against McMahon and her release of potential claims against WWE and McMahon.”
Because the payments were not disclosed, the WWE filed inaccurate audited financial disclosures.
“The case is closed. Today ends nearly three years of investigation by different governmental agencies. 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,” McMahon said in a statement. “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.”
“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,” said Thomas P. Smith Jr., Associate Regional Director in the New York Regional Office of the SEC, in announcing the settlement.
McMahon was investigated for misconduct claims in 2022 by the company’s board, leading to his retirement. In a shock move, however, he used his majority ownership to appoint himself and two others to the WWE board in Jan. 2023, kicking off a sale process that eventually led to a deal with Endeavor create TKO Group Holdings.
After the deal was completed, McMahon was sued by a former employee over claims of sex trafficking and battery, and he resigned a day later while saying that he strongly denied the allegations.
Sources told The Hollywood Reporter at the time that the lawsuit shocked senior executives at the company with some of its details, and that it was threatening some deals (including sponsorship agreements) that the company was seeking to execute. In addition, the suit came just days after the WWE inked a 10-year deal with Netflix.
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