WWE founder Vince McMahon faces SEC charges over settlements

The Securities and Exchange Commission accused former WWE boss Vince McMahon of violating federal securities laws by failing to inform his pro wrestling company’s board of sexual conduct-related settlements totaling $10.5 million -Dollar with two women on his behalf and on behalf of the WWE, the SEC said Friday.

McMahon, whose wife Linda was appointed Secretary of the Department of Education by President-elect Donald Trump, agreed to settle administrative fees and pay a $400,000 civil penalty and restitution of $1.33 million to WWE after he had consented to an order finding that he had violated the Securities Exchange Act, the SEC said.

The SEC said McMahon’s failure to notify WWE’s board of directors, legal department, accountants or auditor of the settlements “circumvented WWE’s system of internal accounting controls and resulted in material misstatements in WWE’s 2018 and 2021 financial statements.” .

The settlements came to light in the spring of 2022 after the WWE board of directors held a special meeting to discuss allegations against McMahon, the company’s then-chairman and CEO. He denied the claims.

An investigation approved by the board within months revealed about $14.6 million in unrecognized expenses that McMahon, 79, had paid or was due to pay in connection with settlement agreements with five women from 2006 to 2022, which were included in the company’s financial statements WWE should have been captured.

McMahon resigned as CEO and chairman in July 2022 and a month later, WWE filed amended financial reports with the SEC for 2019, 2020 and 2021.

McMahon returned as WWE’s executive chairman in January 2023 and merged with Ultimate Fighting Competition’s parent company and Endeavor Group Holdings in September 2023, creating a new company. Investments of the TKO Groupwhose shares are traded on the New York Stock Exchange.

One of the settlement agreements listed by the SEC required McMahon to pay $3 million to a former WWE employee in exchange for her keeping quiet about a relationship with him and releasing potential legal claims against McMahon and the company.

This woman was not named.

But former WWE employee Janel Grant filed a federal lawsuit against McMahon last year, accusing him of sexual assault and human trafficking and claiming he agreed to pay her $3 million as part of a nondisclosure agreement. Grant says McMahon ended up paying her just $1 million.

McMahon resigned as chairman of TKO Group following Grant’s lawsuit, which is pending in U.S. District Court in Connecticut.

The other undisclosed deal required McMahon to pay a former WWE independent contractor who claimed that “McMahon assaulted her and derailed her career after she refused to have a sexual relationship with him.” it in the SEC’s order.

The SEC said WWE overstated its 2018 net income by about 8% and its 2021 net income by about 1.7% by failing to account for the women’s agreements.

“McMahon received incentive-based compensation and realized gains from the sale of WWE common stock during the 12-month period following the filing of the financial statements, which WWE later restated based on the facts described herein,” the SEC’s order states. “McMahon failed to fully reimburse WWE or his successor the interest on these winnings and incentive-based compensation, in violation of Section 304 of the Sarbanes-Oxley Act of 2002.”

McMahon said in a statement to NBC News: “The case is closed. Today marks the end of nearly three years of investigations by various government agencies. There was much speculation about what exactly the government was investigating and what the outcome would be.”

“As today’s resolution shows, much of this speculation was misguided and misleading,” McMahon said.

“Ultimately, there were never more than minor accounting errors regarding some personal payments I made as CEO of WWE several years ago. I’m thrilled that I can now put all this behind me.”

McMahon and his wife Linda are friends of Trump.

Linda McMahon served as head of the federal Small Business Administration during Trump’s first term in the White House.