CNN Wire: Ex-WWE CEO McMahon settles SEC charges over undisclosed settlements

Vince McMahon, the embattled former CEO of WWE, settled SEC charges over undisclosed settlements he made to women in 2019 and 2022. CNN Photo

Originally Published: 10 JAN 25 13:55 ET

By John Towfighi, CNN

Stamford’s Vince McMahon agreed to pay $1.7 million to settle Securities and Exchange Commission charges over settlements he made on behalf of himself and World Wrestling Entertainment without properly disclosing them to the company’s board of directors, the SEC announced Friday.

McMahon, the former chief executive of Stamford-based WWE, made two settlement payments to women in 2019 and 2022 on behalf of himself and WWE without properly disclosing them to the WWE board of directors, legal department or accountants, the SEC said.

The undisclosed settlement payments caused issues with WWE’s financial accounting and disclosures, the SEC added. WWE is owned currently by TKO Group Holdings, a company that went public in 2023.

Without admitting or denying the SEC’s findings of wrongdoing, McMahon agreed to pay a $400,000 civil penalty in addition to reimbursing the WWE just over $1.3 million, according to the SEC.

In one of the undisclosed settlements, McMahon paid a former employee $3 million for her to agree not to disclose her relationship with McMahon or make claims against him or the WWE, the SEC said. In the other undisclosed settlement, McMahon paid an independent contractor $7.5 million for her not to disclose allegations against McMahon, the SEC said.

Because McMahon did not disclose the settlements with the company, it overstated net income in 2018 by about 8% and net income in 2021 by about 1.7%, according to the SEC.

“Doing so circumvented WWE’s system of internal accounting controls and caused material misstatements in WWE’s 2018 and 2021 financial statements,” the SEC said. WWE reissued its financial statements in August 2022 after learning of McMahon’s settlement agreements.

“There was never anything more to this than minor accounting errors with regard to some personal payments that I made several years ago while I was CEO of WWE,” McMahon said in a statement. “I’m thrilled that I can now put all this behind me.”

WWE and TKO Group Holdings did not respond to CNN’s request for comment.

“Company executives cannot enter into material agreements on behalf of the company they serve and withhold that information from the company’s control functions and auditor,” Thomas P. Smith Jr., the associate regional director in the SEC’s New York Regional Office said in the agency’s press release.

McMahon has been embattled in recent years with allegations of sexual misconduct. In October, McMahon and his wife Linda, who is president-elect Donald Trump’s pick for Education Secretary, were named in a lawsuit alleging the McMahon’s knowingly enabled the sexual abuse of children by a WWE employee in the 1980s.

Laura Brevetti, an attorney for Linda McMahon, called the allegations false.

“This civil lawsuit based upon thirty-plus year-old allegations is filled with scurrilous lies, exaggerations and misrepresentations regarding Linda McMahon,” Brevetti said. “Ms. McMahon will vigorously defend against this baseless lawsuit and without doubt ultimately succeed.”

Jessica Rosenberg, an attorney for Vince McMahon, did not respond to CNN’s request for comment for this story. Rosenberg said in a previous statement that the lawsuit’s allegations are false.

The Wall Street Journal previously reported in 2022 McMahon had paid more than $12 million to four women to cover up “allegations of sexual misconduct and infidelity.”

In 2022, McMahon stepped down as CEO of WWE and the following year paid a multimillion-dollar settlement to Rita Chatterton, a former employee and referee, who accused McMahon of raping her in 1986. McMahon returned to WWE’s board in January 2023.

“Mr. McMahon denies and always has denied raping Ms. Chatterton. And he settled the case solely to avoid the cost of litigation,” Jerry McDevitt, a lawyer for McMahon, told the Journal at the time.

In January 2024, McMahon stepped down as chairman of TKO, WWE’s parent company, following allegations of sexual assault and trafficking. McMahon has denied the allegations.