The Securities and Exchange Commission (SEC) announced on Friday that it has reached a settlement with Vince McMahon regarding his failure to disclose settlement agreements that violated the Securities Exchange Act.
According to the SEC, McMahon did not inform WWE’s Board of Directors, accountants, or legal department of “hush money” payments he made in 2019 and 2022 to two women in exchange for non-disclosure agreements. The SEC stated that this failure “circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements.”
McMahon’s actions led to WWE overstating its net income by approximately 8 percent in 2018 and 1.7 percent in 2021. WWE issued updated financial statements in 2022 after the settlements came to light.
As part of the settlement, McMahon will reimburse WWE $1.33 million and pay a civil penalty of $400,000.
Attorney Ann Callis, representing Janel Grant in her lawsuit against McMahon, WWE, and John Laurinaitis, believes the SEC ruling is proof the NDA her client signed was unlawful.
Callis released the following statement:
“During his time leading WWE, Vince McMahon acted as if rules did not apply to him, and now we have confirmation that he repeatedly broke the law to cover up his horrifying behavior, including human trafficking. The SEC’s charges prove that the NDA Vince McMahon coerced Ms. Grant into signing violates the law, and therefore her case must be heard in court. 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.”
McMahon’s legal team has been attempting to have Grant’s lawsuit against McMahon, WWE, and Laurinaitis moved to private arbitration due to a clause in the NDA. This would mean details of the case would not be made public.
Vince McMahon offered the below statement, referring to the matter as “accounting errors with regard to some personal payments.”
“The case is closed. Today ends nearly three years of investigation by different governmental agencies. There has been a great deal of speculation about what exactly the government was investigating and what the outcome would be. As today’s resolution shows, much of that speculation was misguided and misleading.
“In the end, 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.”
The SEC stated:
“The Securities and Exchange Commission today announced settled charges against Vince McMahon, the former Executive Chairman and CEO of World Wrestling Entertainment Inc., for signing two settlement agreements, one in 2019 and one in 2022, on behalf of himself and WWE without disclosing the agreements to WWE’s Board of Directors, legal department, accountants, financial reporting personnel, or auditor. Doing so circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements.”
The full statement from the Securities and Exchange Commission is available here.