CNBC reports that Vince McMahon has resolved SEC charges against him related to undisclosed settlements he made during his time as WWE Chairman. He was charged with violating securities laws by not telling the WWE Board of settlements with two separate women that totaled $10.5 million. He has agreed to settle and will pay a $400,000 civil penalty, as well as reimburse WWE with $1.33 million.
One settlement was for $3 million to a former WWE employee about a relationship the two had, giving her the money in exchange for her silence and not bringing any potential legal claims against McMahon or WWE. While the woman was not named, this is very similar to the story of Janel Grant. Grant filed a lawsuit against McMahon and accused him of sex trafficking and rape. He claimed that he agreed to pay her $3 million as part of a nondisclosure agreement, but only gave her $1 million. McMahon is also under federal investigation for Grant’s claims. The other deal was to a former independent contractor in WWE who claimed that he “assaulted her and derailed her career after she refused to engage in a sexual relationship with him” in 2005.
McMahon agreed to an order that found he violated the Securities Exchange Act. The SEC said that because he didn’t tell the WWE’s board, legal dapartment, accountants or auditor of the settlements, he “circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements.” They said because the agreements weren’t recorded, WWE overstated its net income by 8% in 2018 and 1.7% in 2021.
The SEC order said: “McMahon received incentive-based compensation and realized profits from the sale of WWE common stock during the 12-month period following the filing of financial statements that WWE subsequently restated due to the facts described herein. McMahon has not fully reimbursed WWE or its successor in interest for these profits and incentive-based compensation and therefore violated Section 304 of the Sarbanes-Oxley Act of 2002.”
McMahon added in a statement: “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. 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.“
