Five law firms have announced via press releases in the past week that they have launched investigations into the WWE over potentially violating federal security laws, engaging in unlawful business practices, breaching fiduciary duties and allegedly harming their investors by producing misleading information. The announcements all came days after The Wall Street Journal broke the news that the WWE Board of Directors was investigating Vince McMahon for allegedly paying millions of dollars to a former WWE employee to keep their affair from becoming public. McMahon’s legal representation has disputed the notion that he paid any money to the former employee upon their departure and the report stated McMahon paid $3 million out of his own pocket as part of a nondisclosure agreement. However, it was also noted that her salary was allegedly doubled when the affair began.
The firms that have since announced their investigations include Scott+Scott, Rosen Law Firm, Schall Law Firm, Bragar Eagel & Squire and Labaton Sucharow. You can see the highlights of each press release below. McMahon has temporarily stepped down as CEO and Chairman during the investigation with his daughter, Stephanie McMahon, taking over as interim Chairwoman and CEO.
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Scott+Scott
Scott+Scott Attorneys at Law LLP (“Scott+Scott”), a national securities and consumer rights litigation firm, is investigating whether certain directors and officers of World Wrestling Entertainment, Inc. (“WWE”) (NYSE: WWE) breached their fiduciary duties to WWE and its shareholders.
Scott+Scott is investigating whether members of WWE’s board of directors or senior management failed to manage WWE in an acceptable manner, in breach of their fiduciary duties to WWE, and whether WWE and its shareholders have suffered damages as a result.
On June 15, 2022, the Wall Street Journal reported that the WWE board was investigating an alleged $3 million settlement that CEO Vince McMahon agreed to pay in January 2022 to a former WWE employee with whom he allegedly had an affair.
Rosen Law Firm
SO WHAT: If you purchased WWE securities you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. The Rosen Law Firm is preparing a class action seeking recovery of investor losses.
WHAT IS THIS ABOUT: On June 15, 2022, The Wall Street Journal published an article entitled “WWE Board Probes Secret $3 Million Hush Pact by CEO Vince McMahon, Sources Say” which revealed that “[t]he board of World Wrestling Entertainment Inc. [] is investigating a secret $3 million settlement that longtime chief executive Vince McMahon agreed to pay to a departing employee with whom he allegedly had an affair, according to documents and people familiar with the board inquiry.” The article further revealed, among other things, that “[t]he board’s investigation, which began in April, has unearthed other, older nondisclosure agreements involving claims by former female WWE employees of misconduct by Mr. McMahon and one of his top executives, John Laurinaitis, the head of talent relations at WWE, the people said.”
On this news, WWE stock price fell $2.31 per share, or 3.4%, to close at $64.87 per share on June 16, 2022, the next full trading day.
On June 17, 2022, before trading hours, WWE issued a press release entitled “WWE® & Board of Directors Joint Release” which announced that “a Special Committee of the Board is conducting an investigation into alleged misconduct by its Chairman and CEO Vincent McMahon and John Laurinaitis, head of talent relations, and that, effective immediately, McMahon has voluntarily stepped back from his responsibilities as CEO and Chairman of the Board until the conclusion of the investigation.”
On this news, WWE stock fell during intraday trading on June 17, 2022.
Schall Law Firm
The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of World Wrestling Entertainment, Inc. (“WWE” or “the Company”) (NYSE: WWE) for violations of the securities laws.
The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. WWE is the subject of a June 15, 2022, article in the Wall Street Journal titled: “WWE Board Probes Secret $3 Million Hush Pact by CEO Vince McMahon, Sources Say.” According to the article, the Company’s board “is investigating a secret $3 million settlement that longtime chief executive Vince McMahon agreed to pay to a departing employee with whom he allegedly had an affair, according to documents and people familiar with the board inquiry.” The article continues, “the board’s investigation, which began in April, has unearthed other, older nondisclosure agreements involving claims by former female WWE employees of misconduct by Mr. McMahon and one of his top executives, John Laurinaitis, the head of talent relations at WWE, the people said.” On June 17, 2022, the Company issued a press release stating, “a Special Committee of the Board is conducting an investigation into alleged misconduct by its Chairman and CEO Vincent McMahon and John Laurinaitis, head of talent relations, and that, effective immediately, McMahon has voluntarily stepped back from his responsibilities as CEO and Chairman of the Board until the conclusion of the investigation.”
Bragar Eagel & Squire
WWE is the subject of a June 15, 2022, article in the Wall Street Journal titled: “WWE Board Probes Secret $3 Million Hush Pact by CEO Vince McMahon, Sources Say.” According to the article, the Company’s board “is investigating a secret $3 million settlement that longtime chief executive Vince McMahon agreed to pay to a departing employee with whom he allegedly had an affair, according to documents and people familiar with the board inquiry.” The article continues, “the board’s investigation, which began in April, has unearthed other, older nondisclosure agreements involving claims by former female WWE employees of misconduct by Mr. McMahon and one of his top executives, John Laurinaitis, the head of talent relations at WWE, the people said.”
On June 17, 2022, the Company issued a press release stating, “a Special Committee of the Board is conducting an investigation into alleged misconduct by its Chairman and CEO Vincent McMahon and John Laurinaitis, head of talent relations, and that, effective immediately, McMahon has voluntarily stepped back from his responsibilities as CEO and Chairman of the Board until the conclusion of the investigation.”
On this news, WWE stock fell $1.94, or 3%, to close at $62.51 on June 17, 2022.
Labaton Sucharow
Labaton Sucharow, a nationally ranked and award-winning shareholder rights law firm, announces that it is investigating potential violations of the federal securities laws by World Wrestling Entertainment, Inc. (“World Wrestling Entertainment” or “the Company”) (NYSE:WWE).
On June 15, 2022, just before the market closed, The Wall Street Journal reported that the board at World Wrestling Entertainment (“WWE”) is investigating a secret $3 million settlement between longtime CEO Vince McMahon and a departing employee with whom he allegedly had an affair.
Shares of World Wrestling Entertainment stock traded down close to 3% in intraday trading on June 16, 2022.
Then on June 17, 2022, before the market opened, WWE announced that Chairman and CEO Vince McMahon would be stepping down from both roles amid the ongoing investigation, and that his daughter and WWE board member, Stephanie McMahon, would return to the company as interim CEO.
The WWE board of directors issued a statement announcing that they formed a special committee to investigate the alleged improper behavior of Vince McMahon and another WWE employee.
On this news, shares of World Wrestling Entertainment fell nearly 4% in intraday trading on June 17, 2022.
