U.S. District Judge Andrew P. Gordon of the District of Nevada recently ruled a shareholder lawsuit accusing Wynn Resorts management of deceiving investors by withholding information about Steve Wynn’s alleged sexual misconduct may proceed.
Gordon granted the plaintiffs’ motion for class certification and appointed Pomerantz LLC as lead class counsel and Muehlbauer Law Office as local/liaison counsel.
The Wall Street Journal first reported the claims about Wynn’s actions in an article titled “Dozens of People Recount Pattern of Sexual Misconduct by Las Vegas Mogul Steve Wynn,” published in January 2018.
The story alleged Wynn forced several Wynn Resorts female employees to perform sexual acts on him. The article also revealed the company paid a $7.5 million settlement to one employee who Wynn forced to have sex with him. Wynn has repeatedly denied any and all allegations of sexual misconduct.
Wynn had to resign as chairman and chief executive officer of Wynn Resorts and the company had to replace the management team that allegedly covered up Wynn’s alleged misconduct.
Gaming regulators said the company’s board of directors repeatedly ignored the allegations. The class action suit also named the company’s C-level executives, including former Chief Executive Officer Matt Maddox and current Chief Executive Officer Craig Scott Billings.
Following the Wall Street Journal’s article, the Massachusetts Gaming Commission announced a regulatory review of the company. The price of Wynn Resorts stock dropped 10 percent, or $20.31, in one day.
Massachusetts regulators also fined Wynn Resorts $35 million for not disclosing the allegations and fined Wynn for allowing the $7.5 million settlement. However, the company was allowed to keep its license. At the time, Wynn was building the $2.4 billion Encore Boston Harbor in Everett, Massachusetts.
Regarding the appointment of Pomerantz as Lead Counsel, the judge said, “Counsel is experienced in handling securities class actions and is familiar with applicable law, as shown by both their prior experience and their filings in this case.”
Pomerantz Partner Murielle Steven Walsh stated, “We are gratified that the court granted our certification motion. Plaintiffs will now be proceeding with merits discovery into the alleged misconduct by Stephen Wynn against Wynn’s female employees and the enabling actions by Wynn management that allowed it to go on for years. This case continues to demonstrate that corporate integrity and accountability are important issues to investors.”
