of securities and exchange commission Former WWE president Vince McMahon was charged with violating federal securities laws by failing to notify the wrestling company’s commission of a $10.5 million sexual settlement agreement he had with two women on behalf of himself and WWE. The SEC announced Friday that the suspect.
McMahon, whose wife Linda was nominated by President-elect Donald Trump to be Secretary of the Department of Education, has agreed to settle administrative charges, paying a $400,000 civil penalty and reimbursing WWE $1.33 million. order The SEC announced that it had found that he violated securities laws.
The SEC said McMahon’s failure to inform WWE’s board of directors, legal department, accountants and auditors about the settlement caused “material misstatements” in WWE’s 2018 and 2021 financial statements.
Thomas Smith Jr., regional deputy director of the SEC’s New York office, said, “Corporate executives cannot enter into important contracts on behalf of the companies they work for, and cannot share that information with corporate management or auditors.” “You can’t withhold it from people.”
The settlement was revealed in spring 2022 after WWE’s board of directors held a special meeting to discuss the allegations against McMahon, who was then chairman and CEO. He denied the allegation.
An investigation approved by the board within months found payments made by Mr. McMahon, 79, that should have been recorded on WWE’s financial statements in connection with settlement agreements with five women from 2006 to 2022; Approximately $14.6 million in unrecorded expenses were identified.
McMahon stepped down as CEO and chairman in July 2022, and one month later, WWE filed restated financial statements for 2019, 2020, and 2021 with the SEC.
McMahon returned as executive chairman of WWE in January 2023 and merged with the parent company of Ultimate Fighting Competition and Endeavor Group Holdings to form a new corporation in September 2023. TKO Group Holdings‘s stock is traded on the New York Stock Exchange.
One of the settlement agreements detailed by the SEC calls for McMahon to pay former WWE employees $3 million in exchange for remaining silent about his relationship with WWE and waiving any potential legal claims against McMahon and WWE. was obligated to pay.
The woman had no name.
However, former WWE employee Janelle Grant filed a federal lawsuit last year accusing McMahon of sexual assault and human trafficking, and said she agreed to pay McMahon $3 million as part of a non-disclosure agreement. insisted. Grant said McMahon ended up paying her only $1 million.
Mr. McMahon resigned as executive chairman of TKO Group in response to Mr. Grant’s lawsuit pending in the U.S. District Court for the District of Connecticut.
Another non-disclosure agreement, according to the SEC order, charges McMahon with WWE in 2005, alleging that “McMahon assaulted her and derailed her career after she refused to have a sexual relationship with him.” was demanding payment from a former independent contractor.
The SEC said WWE overstated its 2018 net income by approximately 8% and its 2021 net income by approximately 1.7% because the agreements with the women were not recorded.
The SEC’s order states that “McMahon received incentive-based compensation and realized gain on the sale of WWE common stock during the 12 months following the filing of WWE’s later amended financial statements due to the facts described herein.” said. “McMahon violated Section 304 of the Sarbanes-Oxley Act of 2002 by failing to fully repay these profits and interest on incentive-based compensation to WWE or its successor.”
In a statement to NBC News, McMahon said: “The case is closed. Today marks the end of a nearly three-year investigation by various government agencies. What exactly the government was investigating and what the outcome will be. There’s a lot of speculation about that.” . ”
“As today’s resolution demonstrates, much of that speculation was misplaced and misleading,” McMahon said.
“At the end of the day, there was nothing more than a minor accounting error regarding some personal payments I made several years ago when I was the CEO of WWE. Now all of this… I’m excited to be able to forget.”
McMahon and his wife Linda are friends of Trump.
Linda McMahon During Trump’s first term in the White House, he served as head of the Federal Small Business Administration.
