The Securities and Exchange Commission (SEC) announced that it has arranged a settlement agreement with the ex-CEO of WWE, Vince McMahon, concerning undisclosed payments made to an employee and an outside collaborator, who were reportedly involved in personal relationships with him.
McMahon will pay a $400,000 civil penalty, and will reimburse the WWE more than $1.3 million.
The charges brought by the SEC are connected to two settlement agreements that McMahon finalized, one in 2019 and another in 2022. These agreements, which involved both himself and the company, were not disclosed to the WWE board according to the SEC. During this period, McMahon held the position of CEO.
According to the SEC, McMahon was required to pay a former employee $3 million as part of a settlement agreement that included her promise not to reveal their relationship and waive any potential claims against WWE and McMahon. Similarly, McMahon was also obligated to pay a former WWE independent contractor $7.5 million in another settlement agreement, which required her to keep quiet about her allegations against McMahon and relinquish any potential claims against WWE and McMahon.
Because the payments were not disclosed, the WWE filed inaccurate audited financial disclosures.
Thomas P. Smith Jr., Associate Regional Director at the SEC’s New York Regional Office, stated that it is forbidden for company executives to make significant agreements on behalf of their companies without informing the company’s oversight departments and auditors about it.
2022 saw McMahon under investigation for alleged misconduct by the company’s board, prompting his retirement. In an unexpected twist, utilizing his majority shareholding, he appointed himself and two others to the WWE board in January 2023. This action initiated a sale process that culminated in a deal with Endeavor, resulting in the formation of TKO Group Holdings.
Following the finalization of the agreement, McMahon faced a lawsuit from a previous employee concerning accusations of sex trafficking and battery. The next day, he chose to step down, asserting his firm denial of these charges.
According to sources, The Hollywood Reporter reported that the lawsuit startled high-ranking officials at the company due to certain revealing details, and it posed a risk to several deals they were trying to close (such as sponsorships). Moreover, this lawsuit surfaced shortly after the WWE finalized a 10-year contract with Netflix.
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2025-01-10 17:54