Vince McMahon Settles SEC Charges Over Hidden Sexual Misconduct Settlements
Vince McMahon, the former CEO of World Wrestling Entertainment (WWE), has reached a settlement with the Securities and Exchange Commission (SEC) over charges related to undisclosed settlement agreements totaling $10.5 million with two women. The SEC reported that McMahon failed to inform WWE's board and other relevant parties about these settlements, which were made to prevent the women from disclosing potential claims against him and the company.
McMahon resigned from his roles at WWE and its parent company, TKO Group Holdings, in January 2024 following a federal lawsuit that accused him of sexual misconduct. He had initially stepped down in 2022 amid an investigation into similar allegations.
According to the SEC, one of the agreements from 2019 required McMahon to pay $3 million to a former employee to keep her relationship with him confidential, while the other, dated 2022, mandated a payment of $7.5 million to an independent contractor in exchange for her silence over allegations against him.
The SEC stated that McMahon's failure to disclose these agreements led to significant misstatements in WWE's financial statements for 2018 and 2021, causing an overstatement of net income by approximately 8% and 1.7%, respectively. WWE corrected these inaccuracies in August 2022.
As part of the settlement, McMahon agreed to pay a civil penalty of $400,000 and reimburse WWE approximately $1.3 million, all without admitting fault. The SEC emphasized the critical importance of transparency in corporate governance, stating that executives must not enter material agreements without disclosing them to the company's control functions.
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