Vince McMahon Resolves SEC Charges for Undisclosed Agreements
The Securities and Exchange Commission (SEC) has reached an agreement with former WWE CEO Vince McMahon for failing to disclose two settlement agreements to the sports entertainment company’s board of directors. These agreements, which totaled $10.5 million, were signed with two women to prevent them from revealing potential claims against McMahon and WWE.
According to the SEC, McMahon agreed to cease and desist from violating certain provisions, pay a civil penalty of $400,000, and reimburse WWE approximately $1.3 million. McMahon neither admitted nor denied the SEC’s findings.
Today marks the end of nearly three years of investigation by various government agencies. There was much speculation about what exactly the government was investigating and what the outcome would be. As today’s resolution shows, much of that speculation was wrong and misleading. In the end, this was nothing more than minor accounting errors regarding some personal payments I made several years ago when I was CEO of WWE. I am excited to be able to put all of this behind me.
Vince McMahon
McMahon resigned from his position as WWE CEO in 2022 amid an investigation into allegations similar to those in the lawsuit. In January 2024, he resigned from WWE’s parent company after a former employee filed a federal lawsuit accusing him of sexual misconduct.
The SEC revealed that one of the agreements was signed in 2019 and the other in 2022. One of them obliged McMahon to pay a former employee 3 million dollars in exchange for not revealing his relationship with him nor filing claims against WWE and McMahon. The other agreement obliged McMahon to pay a former independent contractor of WWE 7.5 million dollars in exchange for not revealing his accusations against McMahon nor filing claims.
Ann Callis, lawyer for Janel Grant, a former WWE employee who filed a lawsuit against the company and McMahon for sexual assault and trafficking, stated that the SEC charges confirm that McMahon broke the law to cover up his behavior.
The SEC charges demonstrate that the confidentiality agreement Vince McMahon forced Ms. Grant to sign violates the law and, therefore, her case must be heard in court. While the prosecutors of the Southern District of New York continue their criminal investigation, we look forward to presenting new evidence in our civil case.
Ann Callis
McMahon has denied Grant’s accusations.
The SEC noted that by not disclosing the agreements to the board of directors, legal department, accountants, financial reporting staff, or WWE’s auditor, McMahon circumvented the company’s internal accounting controls system and caused misstatements in its 2018 and 2021 financial statements.
Because the payments required by the 2019 and 2022 agreements were not recorded, WWE overstated its net revenues for 2018 by approximately 8% and its net revenues for 2021 by approximately 1.7%.
Once WWE learned of the agreements, it issued a restatement of its financial statements in August 2022.
The company’s executives cannot enter into significant agreements on behalf of the company they serve and withhold that information from the control functions and the company’s auditor.
Thomas P. Smith Jr.
McMahon was the main and most recognizable figure of WWE for decades. When he bought the then World Wrestling Federation from his father in 1982, wrestling matches were held in small venues and appeared on local cable channels. WWE matches are now held in professional sports stadiums, and the company’s live weekly television show, “Raw”, made its debut on Netflix on Monday, where it had 4.9 million views worldwide and averaged 2.6 million households in the United States, according to VideoAmp.
