TKO Executive Chairman of the Board Vince McMahon is seen during a ceremony announcing Dwayne “The Rock” Johnson has joined the Board of Directors for TKO at New York Stock Exchange on January 23, 2024 in New York City.
Michelle Farsi | UFC | Getty Images
The Securities and Exchange Commission charged former WWE boss Vince McMahon with violating federal securities laws by failing to inform his pro wrestling company’s board of settlement agreements totaling $10.5 million with two women on behalf of himself and the WWE, the SEC said Friday.
McMahon has agreed to settle the administrative charges and agreed to pay a $400,000 civil penalty and reimburse the WWE $1.33 million after consenting to an order finding that he violated the Securities Exchange Act, the SEC said.
The SEC said that McMahon’s failure to inform the WWE’s board, legal department, accountants or auditor of the settlements “circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements.
One of the settlement agreements obligated McMahon to pay $3 million to a former WWE employee in exchange for her silence about a relationship with him and her releasing potential legal claims against McMahon and the company.
That woman was not named. But former WWE employee Janel Grant last year filed a federal lawsuit against McMahon, accusing him of sexual assault and trafficking, and alleging that he had agreed to pay her $3 million as part of a nondisclosure agreement. Grant says McMahon only ended up paying her $1 million.
The other deal required McMahon to pay a former independent contractor for WWEÂ who alleged that “McMahon assaulted her and derailed her career after she refused to engage in a sexual relationship with him” in 2005, according to the SEC order.
The SEC said that because the agreements with the women were not recorded, WWE overstated its net income for 2018 by about 8% and its 2021 net income by about 1.7%.
“McMahon received incentive-based compensation and realized profits from the sale of WWE common stock during the 12-month period following the filing of financial statements that WWE subsequently restated due to the facts described herein,” the SEC’s order said. “McMahon has not fully reimbursed WWE or its successor in interest for these profits and incentive-based compensation and therefore violated Section 304 of the Sarbanes-Oxley Act of 2002.”
McMahon, in a statement to NBC News, said, “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,” McMahon said. “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.”
McMahon and his wife, Linda, are friends of President-elect Donald Trump.
Linda McMahon served as head of the federal Small Business Administration during Trump’s first term in the White House.
Trump has nominated Linda McMahon as secretary of the Department of Education.
This is breaking news. Please refresh for updates.
