By Paul Schott
The Hour, Norwalk, Conn.
(TNS)
Jan. 10—STAMFORD — The Securities and Exchange Commission announced Friday a settlement with WWE founder Vince McMahon that resolves charges of him making undisclosed payments to a former WWE employee and former independent contractor.
The SEC’s charges focused on two settlement agreements made by McMahon when he was CEO of the Stamford-based sports-entertainment company, one in 2019 and the other in 2022. By not disclosing those agreements to the company’s board of directors, its legal department, accountants, financial reporting personnel or auditor, McMahon “circumvented WWE’s system of internal accounting controls” and “caused material misstatements” in WWE’s 2018 and 2021 financial statements, SEC officials alleged.
McMahon did not admit to or deny the SEC’s findings, but he agreed to pay a $400,000 civil penalty and reimburse WWE for about $1.33 million, according to SEC officials.
“Company executives cannot enter into material agreements on behalf of the company they serve and withhold that information from the company’s control functions and auditor,” Thomas P. Smith Jr., associate regional director in the SEC’s New York regional office, said in a written statement.
In his own statement, McMahon said, “there was never anything more to this than minor accounting errors with regard to some personal payments that I made several years ago while I was CEO of WWE. I’m thrilled that I can now put all this behind me.”
One of the settlement agreements required McMahon to pay a former employee $3 million in exchange for the former employee’s agreement to not disclose her relationship with McMahon and her release of potential claims against WWE and McMahon, SEC officials said.
While not named in the settlement agreement, the former employee in question is Janel Grant, who worked at the company from 2019 to 2022, her lawyer confirmed. In January 2024, Grant filed a lawsuit alleging that McMahon sexually assaulted and trafficked her. As part of the complaint, Grant said that McMahon breached their nondisclosure agreement by only paying $1 million. McMahon has denied the allegations.
“During his time leading WWE, Vince McMahon acted as if rules did not apply to him,” Ann Callis, Grant’s attorney, said in a statement responding to the McMahon-SEC settlement.
The other agreement obligated McMahon to pay a former WWE independent contractor $7.5 million in exchange for her agreement to not disclose her allegations against McMahon and her release of potential claims against WWE and McMahon, according to SEC officials.
Because McMahon failed to disclose the agreements to WWE, the company “did not evaluate the disclosure implications or the appropriate accounting for these transactions in its financial statements,” SEC officials said. The agency also found that, because the payments required by the agreements were not recorded, WWE overstated its 2018 net income by approximately 8 percent and its 2021 net income by about 2 percent.
SEC officials also asserted that McMahon signed management representation letters that were provided to WWE’s auditor that did not disclose either agreement. After learning of those pacts, WWE issued a restatement of its financial statements in August 2022, SEC officials said.
Other legal issues
Grant’s case resumed last month after a six-month stay that was intended to facilitate an investigation of McMahon by the U.S. Attorney’s Office for the Southern District of New York.
“While prosecutors for the Southern District of New York continue their criminal investigation, we look forward to bringing forward new evidence in our civil case about the sexual exploitation Ms. Grant endured at WWE by Vince McMahon and John Laurinaitis,” Callis said.
John Laurinaitis, a former WWE executive, is the other individual named as a defendant in Grant’s lawsuit. An attorney for Laurinaitis denied the allegations against his client, VICE News reported in February 2024.
USAO officials declined to comment on McMahon’s settlement with the SEC. They have also repeatedly declined to comment on the scope of their probe of McMahon.
A day after Grant filed her complaint, McMahon resigned as executive chairman and as a member of the board of directors of TKO Group, WWE’s parent company, which was formed in 2023 through WWE’s merger with mixed martial arts organization UFC.
While he has denied Grant’s allegations, McMahon said in a statement in January 2024 that he decided to resign, “out of respect for the WWE Universe, the extraordinary TKO business,” and all those “who helped make WWE into the global leader it is today.”
McMahon’s exit came about a year after he orchestrated a boardroom takeover at WWE, following his retirement in July 2022. When McMahon retired, WWE’s board of directors was investigating him for alleged misconduct.
Separate from Grant’s case, McMahon and his wife, Linda McMahon, a former WWE CEO and President-elect Donald Trump’s pick to serve as the next U.S. education secretary, are accused in a lawsuit filed last October by several former WWE employees of being aware of a ringside manager’s sexual abuse of the plaintiffs when they were boys several decades ago. An attorney for Vince McMahon denied the allegations.
Last month, a federal judge in Maryland paused the case against the McMahons, pending a ruling in a separate case in Maryland’s Supreme Court that focuses on the constitutionality of the Maryland Child Victims Act of 2023. That law repealed the statute of limitations for child sexual abuse lawsuits.
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(c)2025 The Hour (Norwalk, Conn.). Visit The Hour (Norwalk, Conn.) at www.thehour.com. Distributed by Tribune Content Agency LLC.
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Tags: Accounting, SEC
