Wynn Resorts Settles $70M Lawsuit by Investors

Las Vegas-based luxury casino resort operator Wynn Resorts will be paying yet another hefty sum in a legal battle. The funds will be used to settle the fallout from a series of sexual misconduct allegations against its former CEO and founder, Steve Wynn. 

The company this week announced a $70 million settlement in a large class action lawsuit covering anyone who invested in Wynn Resorts between March 2016 and February 2018. 

In 2018, a total of nine women spoke to The Wall Street Journal about Steve Wynn. They accused the veteran casino mogul of sexual assault, coercion, and harassment against former employees spanning the previous decade. 

The plaintiffs in the lawsuit alleged that Wynn Resorts executives at that time knew about and did not act on the sexual misconduct allegations against its CEO and founder, and in the process, lied to its investors. 

They also sought damages relating to the subsequent drop in Wynn Resorts’ share price after the allegations were made public and Wynn resigned.

“The alleged defendants were aware of numerous allegations of sexual misconduct made against Wynn over the course of several decades and defendants repeatedly denied those allegations and helped to cover them up,” said a press release from Pomerantz Law, who handled this latest case for the plaintiffs. 

The Lawsuit 

The lawsuit was brought by John and JoAnn Ferris and Jeffrey Larsen under the case name Ferris v. Wynn Resorts Ltd. New York-based Pomerantz handled proceedings for the plaintiffs and all those who joined in the class action with them. 

“This case should serve as a warning to corporations and their officers that talk is not, in fact, cheap,” said Pomerantz partner Murielle Steven Walsh, who led the securities class action lawsuit. 

“Investors care about corporate integrity and accountability, and companies that are accused of making statements to cover up or deny allegations of serious misconduct by executives face a potentially steep financial reckoning.”

The $70 million settlement will be split between all those who are eligible. Pomerantz says it cannot estimate at this time how many people that might be. The case is just the latest in a string of settlements Wynn Resorts has paid out since 2018 based on the allegations of the nine women.

The Allegations and the Fallout

Since the Wall Street Journal piece in 2018, Wynn Resorts has paid out more than a hundred million in settlements over the allegations. 

The Nevada Gaming Control Board fined Wynn Resorts $20 million and Wynn himself $10 million for not acting on the allegations before they became public. It also permanently barred Steve Wynn from holding any position in any Nevada gambling company. 

The Massachusetts Gaming Commission fined Wynn Resorts’ Encore Boston Harbor casino $35.5 million, as it said executives did not reveal the allegations when referencing Wynn’s character during its licence application process.

Among the allegations against Wynn are that he paid $7.5 million in hush money to one former employee who had accused him of rape. He is also alleged to have orchestrated a years-long campaign of harassment against another former employee who resisted his advances.  

For his part, Wynn, now 82, has always denied the allegations. He has, on occasion, suggested they may have been fabricated by his ex-wife, Elaine Wynn. It’s a claim she has denied. 

He now holds no gambling business interests, having sold his shares in Wynn Resorts. He retains an estimated net worth of $3.7 billion.

This latest settlement in a six-year long case comes at a tough time for Wynn Resorts. The operator’s flagship Wynn Las Vegas recently reached a huge $130 million settlement with the U.S. Department of Justice. That settlement was over allegations that former company agents facilitated transactions for gamblers depositing money of suspicious provenance.