Posted on 1/10/125 by Colin Vassallo
Former WWE Chairman Vince McMahon was found in violation of
the Securities Exchange Act by the Securities and Exchange
Commission for failing to disclose settlement agreements
with the WWE Board of Directors and ordered to pay a
$400,000 penalty and reimburse WWE the sum of $1,330,915.90.
This stems from previous NDAs from 2019 and 2022 which had
an effect on the reported WWE earnings, with the company
overstating its 2018 net income by 8% and its 2021 net
income by 1.7%.
It’s unclear if this was part of the 2024 investigation by
the Southern District of New York which was investigating
allegations of sex trafficking and sexual assault or if it
was a separate investigation after the NDA stories came up
in the media.
The full press release from the SEC reads as follows:
“The order finds that, because McMahon failed to disclose
the agreements to WWE, WWE did not evaluate the disclosure
implications or the appropriate accounting for these
transactions in its financial statements. The SEC’s order
finds that, because the payments required by the 2019 and
2022 agreements were not recorded, WWE overstated its 2018
net income by approximately 8 percent and its 2021 net
income by approximately 1.7 percent. In addition, according
to the order, these payments should have been disclosed as
related party transactions.
The order further finds that McMahon signed management
representation letters that were provided to WWE’s auditor
that did not disclose the existence of either settlement
agreement. After learning of the settlement agreements, WWE
issued a restatement of its financial statements in August
2022.
McMahon consented to the entry of the SEC’s order finding
that he violated the Securities Exchange Act by knowingly
circumventing WWE’s internal accounting controls and that he
directly or indirectly made or caused to be made false or
misleading statements to WWE’s auditor. The order also finds
that McMahon caused WWE’s violations of the reporting and
books and records provisions of the Exchange Act. Without
admitting or denying the SEC’s findings, McMahon agreed to
cease-and-desist from violating those provisions, pay a
$400,000 civil penalty, and reimburse WWE $1,330,915.90
pursuant to Section 304(a) of the Sarbanes-Oxley Act.”