Vince McMahon, the Executive Chairman of the Board for TKO, made headlines at the New York Stock Exchange on January 23, 2024, where Dwayne “The Rock” Johnson became a new member of TKO’s Board of Directors. However, McMahon found himself in the center of a legal storm when the Securities and Exchange Commission (SEC) charged him with breaching federal securities laws. The SEC reported that McMahon failed to disclose settlement agreements worth $10.5 million, involving both personal and corporate matters with WWE.
To resolve these administrative charges, McMahon has agreed to pay a civil penalty of $400,000 and reimburse WWE $1.33 million, acknowledging that he breached the Securities Exchange Act. This move follows findings that he bypassed WWE’s internal accounting controls, leading to inaccurate financial reports for the years 2018 and 2021.
One notable settlement involved a former WWE employee who was paid $3 million to remain silent about her relationship with McMahon and refrain from pursuing legal action against him and WWE. Although unnamed in the SEC filings, Janel Grant, a former WWE employee, had previously sued McMahon, accusing him of sexual misconduct and claiming he only paid her $1 million out of the agreed sum.
Another case mentioned in the SEC order involved an allegation from a former WWE independent contractor, who claimed McMahon assaulted her and negatively impacted her career after she rejected his advances in 2005. Due to the lack of documentation for these agreements, WWE’s reported net income was overstated by significant percentages in the financial years 2018 and 2021.
During the period following these financial misstatements, McMahon reportedly received incentive-based compensation and profits from WWE stock sales. He has yet to fully reimburse these gains, violating the Sarbanes-Oxley Act of 2002.
On another note, McMahon and his wife Linda are known associates of President-elect Donald Trump. Linda previously led the Small Business Administration during Trump’s initial White House tenure and has been nominated for the role of Secretary of the Department of Education.
This situation is still developing. Stay tuned for updates.
