McMahon will pay $1.7 million to settle allegations relating to financial silence agreements

The Securities and Exchange Commission said it has settled allegations against the former World Wrestling Entertainment mogul Vince McMahon for allegedly violating federal securities laws by failing to disclose two $10.5 million settlements to WWE.

The The SEC reported on Friday that the 2019 and 2022 settlements were entered into without the knowledge of WWE’s management, legal department, accountants or auditor and “circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements.”

“A company’s management may not enter into material contracts on behalf of the company it serves or withhold that information from the company’s control functions and the auditor,” Thomas P. Smith Jr., deputy director of the SEC’s New York regional office, said in a statement.

McMahon will pay more than $1.7 million in civil penalties and restitution to WWE. McMahon agreed to the settlement without admitting or denying the agency’s findings.

“The case is closed. Today marks the end of a nearly three-year investigation by various government agencies.” McMahon posted on X. “There has been a lot of speculation about what exactly the government is investigating and what the outcome will be. As today’s resolution shows, much of this speculation was wrong and misleading. Ultimately, there was nothing more to it than minor accounting errors regarding some personal payments I made several years ago when I was WWE’s CEO. I’m excited to put this all behind me.”

According to the SEC, the settlements required McMahon to pay $3 million to the former employee and $7.5 million to the contractor; in return, they would not disclose their allegations of misconduct, relationship, or make claims against McMahon or WWE.

The agency found that WWE overstated its 2018 revenue by approximately 8% and its 2021 net profit by approximately 1.7%.

In 2022 investigation by WWE management found that, according to public records, McMahon made payments of at least $14.6 million between 2006 and 2022 for “alleged misconduct.”

Settlements were reached against women, including WWE employees, who alleged that McMahon initiated unwanted sexual contact and forced women to perform sexual acts; in one case, a woman alleged McMahon sent her unsolicited nude photos, first reported by the Wall Street Journal.

The allegations sparked an investigation by the Department of Justice and the SEC.

McMahon issued statements denying the allegations. “I have every confidence that the government’s investigation will conclude with no findings of impropriety,” McMahon said in a statement to The Times at the time.

Although McMahon denied allegations that he paid secret money to stifle claims of sexual misconduct, he left WWE in 2022. However, in January the following year he arranged his own return to the position of president.

In April 2023, it agreed to merge WWE with the Ultimate Fighting Championship, creating a new publicly traded company, TKO Group Holdings, worth $21.4 billion. New entity fired that September. It is controlled by Endeavor Group, an entertainment giant headed by Hollywood energy broker Ari Emanuel. McMahon remained as chairman of the board.

However, within a few months, McMahon was against it he came down from the company of a former WWE employee, Janel Grant sued the company, McMahon and former head of talent relations John Laurinaitis, alleging sexual assault, human trafficking and emotional abuse. Grant claimed that McMahon agreed to pay her $3 million in exchange for her silence.

McMahon’s spokesman said at the time Grant’s lawsuit was filed in a statement to The Times. that her lawsuit was “full of lies, obscene, invented incidents that never occurred, and vindictive distortions of the truth.”

“When he ran WWE, Vince McMahon acted as if the rules didn’t apply to him, and now we have confirmation that he repeatedly broke the law to cover up his appalling behavior, including human trafficking,” said Ann Callis, Grant’s lawyer. statement on Friday. “The SEC’s allegations prove that the NDA (non-disclosure agreement) Vince McMahon forced Ms. Grant to sign violates the law and therefore her case must be heard in court.”