Wynn Resorts Settles $70 Million Class Action Over Sexual Misconduct Allegations Against Former CEO

Wynn Resorts Ltd. has agreed to pay $70 million to settle a class action lawsuit alleging securities fraud related to sexual misconduct claims against founder Steve Wynn. The settlement comes after more than six years of litigation and two mediation sessions.

The lawsuit, initiated by shareholders, claimed that the company failed to disclose serious allegations of sexual misconduct against Steve Wynn, leading to a significant drop in the value of their shares. The allegations surfaced publicly in 2018, raising concerns about the company’s response once executives became aware of the misconduct claims.

Based on a report published by the Las Vegas Review Journal, the New York-based law firm Pomerantz LLP announced on September 19, 2024 that it filed a motion in the U.S. District Court in Nevada seeking preliminary approval of the settlement.

This followed Wynn Resorts’ earlier announcement of the agreement, which did not initially disclose the settlement amount. The lawsuit named Steve Wynn, four former executives, and nine former board members as defendants. Most current executives were dismissed from the suit, and all parties named, including Wynn, are no longer with the company.

The exact recovery amount per shareholder remains unclear. A representative from Pomerantz stated that each class member who submits a valid claim will receive a share of the net settlement fund, but they could not estimate the individual payout at this time. Legal fees and costs will be deducted from the settlement amount.

Wynn Resorts expressed satisfaction with the settlement, viewing it as a resolution to its legal issues stemming from the misconduct allegations. A company representative noted that the majority of the $70 million will be covered by insurance, with Wynn Resorts contributing $9.4 million.

The lawsuit centered on misleading statements made by Wynn Resorts between March 2016 and February 2018, weeks after media reports were published about Steve Wynn’s sexual harassment scandal.

Following a Wall Street Journal article in January 2018, Wynn resigned as chairman and CEO, prompting investigations from gaming regulators in Nevada and Massachusetts.

During this period, Wynn Resorts’ stock plummeted from over $200 per share in January 2018 to around $96 a year later. Currently, shares are trading at approximately $80.

Read related article: DoJ Files a Lawsuit Against Steve Wynn, Ex-CEO of Wynn Resorts