Case to proceed
A Nevada judge has revived certain elements of a securities fraud lawsuit regarding allegations that Wynn Resorts executives ignoring claims of sexual misconduct and harassment against company founder Steve Wynn. This lawsuit had been seeking class-action status.
material misrepresentations and omissions”
US District Judge Andrew Gordon ruled on July 28 that the case can now proceed. This lawsuit alleges that leading executives and board members of Wynn Resorts, as well as Steve Wynn, violated the rules and laws of the Securities and Exchange Commission (SEC) due to “material misrepresentations and omissions.”
Steve Wynn’s attorneys did not comment on the order from Judge Gordon. A Wynn Resorts spokesman stated that the casino company is looking forward to this matter now moving “beyond the allegation stage.”
Focusing on two company statements
As part of Judge Gordon’s 42-page order on the matter, he highlighted two company statements upon which the case should focus. One of these is a press release that the company issued in response to allegations that Steve Wynn’s ex-wife made about “serious misconduct and misuse of company resources by (Steve) Wynn.”
The other focus will be on statements that Steve Wynn and Wynn Resorts made in response to the Wall Street Journal report that initially publicized the misconduct allegations. Judge Gordon outlined that the plaintiffs have “sufficiently alleged” that Steve Wynn, current CEO and president Matt Maddox, as well as two other executives, knew information that contradicted statements that denied the allegations of misconduct. Gordon stated: “The inference that these defendants were aware of Wynn’s alleged misconduct at the time of their statements is cogent and compelling.”
Battles on all fronts
Another federal judge dismissed the original complaint in May 2020. He did, however, allow plaintiffs to make amendments and refile the case. The lawsuit is looking for unspecified damages for unnamed Wynn stockholders after they saw their shares drop in value by over 17% following the publication of the misconduct allegations.
engaged in sexual misconduct over a number of decades with more than a dozen casino workers
Steve Wynn has consistently denied the allegations against him that first came to light following the release of a Wall Street Journal report in January 2018. He allegedly engaged in sexual misconduct over a number of decades with more than a dozen casino workers. The now-79 year old resigned as the CEO and board chairman not long after the publication of the report.
Since then, he has been embroiled in numerous legal battles. Among them include Wynn appealing a Nevada Gaming Commission decision to consider fining the former casino mogul up to $500,000 and deem him unsuitable to regain gambling ties in Nevada. Wynn is also pursuing a defamation lawsuit against the Associated Press and one of its reporters over a story about alleged misconduct by Wynn against two women.
A flurry of payouts
Wynn Resorts has already faced significant investigations into the allegations of sexual misconduct against the company’s founder. The Nevada Gaming Commission finished its year-long investigation in February 2019, resulting in a record fine of $20m against the company for failures to investigate the claims.
In April 2019, the Massachusetts Gaming Commission issued a $35m fine to Wynn Resorts for failing to disclose the allegations against Steve Wynn. CEO Matt Maddox was also personally fined $500,000 for his “clear failure” to investigate at least one complaint of misconduct.
In November 2019, Wynn Resorts accepted damages of $20m from Steve Wynn, as well as another $21m from insurance carriers to settle lawsuits on behalf of former and current employees. These agreements did not see Wynn Resorts admit any sort of wrongdoing.