Vince McMahon has resolved SEC charges related to undisclosed settlements made during his tenure as WWE Chairman, according to CNBC. The SEC charged McMahon with violating securities laws by failing to inform the WWE Board of two settlements totaling $10.5 million with two women. As part of the resolution, McMahon has agreed to pay a $400,000 civil penalty and reimburse WWE $1.33 million.
One of the settlements was a $3 million payment to a former WWE employee in exchange for her silence about a past relationship with McMahon, as well as an agreement not to pursue any legal claims. While the employee’s identity was not disclosed, the case is reminiscent of Janel Grant’s lawsuit against McMahon, where she accused him of sex trafficking and rape. McMahon had agreed to pay Grant $3 million as part of a nondisclosure agreement, but only provided $1 million. McMahon is also under federal investigation for Grant’s claims. The second settlement involved a former WWE independent contractor who claimed McMahon had assaulted her and sabotaged her career in 2005 after she refused to engage in a sexual relationship with him.
The SEC found that McMahon’s actions violated the Securities Exchange Act, as he failed to disclose the settlements to WWE’s board, legal department, accountants, or auditors. This lack of transparency led to material misstatements in WWE’s 2018 and 2021 financial statements. The SEC noted that because these settlements were not 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.“
