Wynn Resorts agrees to $70 million settlement over ex-CEO’s misconduct allegations

Jenny Ortiz September 23, 2024

Wynn Resorts has reached 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. Shareholders claim that the company’s stock value plummeted after these allegations became public in early 2018, resulting in significant financial losses. The lawsuit asserts that Wynn Resorts made misleading statements between March 2016 and February 2018, downplaying the seriousness of the allegations.

The settlement requires Wynn Resorts to contribute $9.4 million, while the remaining amount will be covered by insurers. However, the exact compensation for individual shareholders has not yet been determined. The agreement is currently awaiting preliminary approval from the U.S. District Court in Nevada.

This lawsuit is part of a series of legal challenges faced by Wynn Resorts after the Wall Street Journal exposed a pattern of sexual misconduct by Steve Wynn in 2018. Although Wynn has consistently denied the accusations, he resigned as CEO shortly after the report was published. His departure triggered investigations by both the Nevada Gaming Control Board and the Massachusetts Gaming Commission, resulting in fines of $20 million and $35 million, respectively.

The class-action lawsuit was initiated by shareholders John and JoAnn Ferris and Jeffrey Larsen, naming Wynn Resorts, Steve Wynn, and several former executives and board members as defendants.

Efforts to address corporate misconduct

The settlement forms part of Wynn Resorts‘ broader strategy to address the fallout from the misconduct allegations. Last year, the company settled another class-action lawsuit brought by nine women who accused Steve Wynn of harassment during their employment at the Wynn and Encore salons in Las Vegas. While the amount of that settlement was not disclosed, it marked a significant effort to resolve the legal ramifications of the allegations.

Under the leadership of Matthew Maddox, who succeeded Wynn as CEO, the company has introduced new corporate governance and compliance measures. These initiatives are intended to distance the company from its founder and strengthen accountability across its operations.

Legal consequences for Steve Wynn

The allegations have had severe repercussions for Steve Wynn. In addition to resigning from his role as CEO, he agreed to a $10 million settlement with Nevada regulators in July 2023. He is also barred from holding any position in publicly traded companies under Nevada’s jurisdiction. This settlement aimed to conclude a protracted legal battle with the state’s gambling regulators over claims of workplace misconduct.