The Securities and Exchange Commission (SEC) announced a settlement with former WWE CEO Vince McMahon regarding charges of failing to disclose $10.5 million in settlement agreements with two women. These agreements aimed to prevent potential claims against McMahon and WWE from becoming public.
McMahon resigned from WWE’s parent company, TKO Group Holdings, in January 2024 following a federal lawsuit filed by a former employee alleging serious sexual misconduct against him and another executive. While McMahon denied wrongdoing at the time, this resignation followed his 2022 departure as WWE CEO amidst an investigation into similar allegations.
The SEC revealed that the two undisclosed settlement agreements were signed in 2019 and 2022. The first involved a $3 million payment to a former employee, while the second obligated McMahon to pay a former WWE independent contractor $7.5 million. Both agreements stipulated non-disclosure of allegations and the release of potential claims against McMahon and WWE.
The SEC’s order highlights that McMahon’s failure to disclose these agreements to WWE’s board, legal department, accountants, and auditors circumvented the company’s internal accounting controls. This resulted in material misstatements in WWE’s 2018 and 2021 financial statements, overstating net income by approximately 8% and 1.7%, respectively. Upon learning of the agreements, WWE restated its financial statements in August 2022.
“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,” stated Thomas P. Smith Jr., associate regional director in the SEC’s New York Regional Office.
Without admitting or denying the findings, McMahon agreed to a cease-and-desist order, a $400,000 civil penalty, and reimbursement of approximately $1.3 million to WWE.
In a statement, McMahon asserted that the investigation, spanning nearly three years, concluded with findings of “minor accounting errors” related to personal payments made several years prior. He expressed relief at putting the matter behind him. Manhattan federal prosecutors declined to comment.
Representing Janel Grant, the former WWE employee who filed the lawsuit against McMahon and the company, attorney Ann Callis stated that the SEC charges confirm McMahon broke the law to conceal his behavior. She emphasized the violation of the non-disclosure agreement and the necessity for Grant’s case to be heard in court. The Associated Press typically does not name individuals alleging sexual assault unless they choose to come forward publicly, as Grant has. McMahon denies Grant’s allegations.
McMahon led WWE for decades, transforming it from a regional operation into a global entertainment phenomenon. Under his leadership, WWE events moved from small venues to professional sports stadiums, and its flagship program, “Raw,” recently debuted on Netflix to a significant viewership.
McMahon’s legacy within the wrestling entertainment industry remains complex, juxtaposing his business acumen and contributions to WWE’s global success with the serious allegations and legal challenges he now faces. The SEC settlement marks a significant development in this ongoing narrative, underscoring the importance of corporate transparency and accountability.
