Vince McMahonwho co-founded and previously served as CEO of WWE, and the Securities and Exchange Commission (SEC) have reached a settlement following a years-long investigation into undisclosed settlements.
The federal investigation was launched to determine whether McMahon disclosed to the company’s board and others that he signed two settlement agreements worth more than $10 million with two women so that they would not disclose potential claims against himself. and WWE.
The SEC said that McMahon, without admitting or denying his findings, agreed to cease violating certain provisions, pay a civil penalty of $400,000 and reimburse WWE approximately $1.3 million.
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WWE Chairman and CEO Vince McMahon speaks at a press conference announcing the WWE Network at the 2014 International CES at the Encore Theater at Wynn Las Vegas in Las Vegas on January 8, 2014. (Ethan Miller/Getty Images)
McMahon released a statement Friday saying the situation was the result of “minor accounting errors.”
“The case is closed. Today ends almost three years of investigation by various government agencies. There has been 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 unfounded. misleading and misleading,” the statement said. “Ultimately, there was never anything more to it than minor accounting errors related to some personal payments I made several years ago when I was CEO of WWE. I’m glad I can put all of this behind me now.”
Federal prosecutors declined to comment.
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SEC officials said Friday that one agreement was signed in 2019 and the other in 2022. One agreement required McMahon to pay a former employee $3 million in exchange for the former employee’s agreement not to disclose her relationship with McMahon and her release of potential claims against WWE. and McMahon.
The other agreement required McMahon to pay a former WWE independent contractor $7.5 million in exchange for the independent contractor’s agreement not to disclose her allegations against McMahon and her release of potential claims against WWE and McMahon, the SEC said.
WWE owner Vince McMahon enters the arena during WrestleMania at AT&T Stadium in Arlington, Texas, on April 3, 2022. (Joe Camporeale-USA TODAY Sports)
McMahon stepped down from his role as chairman and CEO of the popular professional wrestling promotion in 2022, pending the results of an internal investigation stemming from allegations of hush-money deals. His daughter Stephanie McMahon took over her father’s leadership duties.
A few weeks after his resignation, McMahon announced his intention to retire from WWE. He returned as executive chairman in 2023, but has resigned from TKO – a company that was the result of a merger between the WWE and Zuffa, the parent company of UFC – in 2024. McMahon’s firing came after a former employee filed a federal lawsuit accusing him and another former executive of serious sexual misconduct.
McMahon insisted he committed no wrongdoing after the lawsuit was filed.
WWE Chairman and CEO Vince McMahon attends a press conference to announce WrestleMania XXIX at MetLife Stadium in East Rutherford, New Jersey, on February 16, 2012. (John W. Ferguson/WireImage)
By not disclosing the agreements to WWE’s board, legal department, accountants, financial reporting staff or auditors, McMahon circumvented the company’s system of internal accounting controls and caused material misstatements in its 2018 and 2021 financial statements, according to the committee.
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The SEC’s order found that because the payments required by the 2019 and 2022 agreements were not recorded, WWE decreased its 2018 net income by approximately 8% and its 2021 net income by approximately 1.7% had overestimated.
Upon learning of the settlement agreements, WWE released a restatement of its financial statements in August 2022.
“Company executives cannot enter into material agreements on behalf of the business they serve and withhold that information from the company’s control functions and auditor,” said Thomas P. Smith Jr., associate regional director at the New York Regional Office, in a statement declaration.
The Associated Press contributed to this report.
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