The Securities and Exchange Commission says that it has settled charges against former WWE CEO Vince McMahon over his failure to disclose to the sports entertainment company’s board and others that he signed two settlement agreements worth $10.5 million with two women in order for them not to reveal potential claims against himself and WWE.
McMahon resigned from WWE’s parent company in January 2024 after a former employee filed a federal lawsuit accusing him and another former executive of serious sexual misconduct.
At the time, McMahon stepped down from his position as executive chairman of the board of directors at WWE’s parent company, TKO Group Holdings.
He continued to deny wrongdoing following the filing of the lawsuit.
McMahon stepped down as WWE’s CEO in 2022 amid an investigation into allegations that match those in the lawsuit.
The SEC said Friday that one agreement was signed in 2019 and the other in 2022.
One agreement required McMahon to pay a former employee $3 million in exchange for the former worker’s agreement to not disclose her relationship with McMahon and her release of potential claims against WWE and McMahon.
The other agreement obligated McMahon to pay a former WWE independent contractor $7.5 million in exchange for the independent contractor’s agreement to not disclose her allegations against McMahon and her release of potential claims against WWE and McMahon, the SEC said.
The commission said that by McMahon not disclosing the agreements to WWE’s board, legal department, accountants, financial reporting personnel, or auditor, it circumvented WWE’s system of internal accounting controls and caused material misstatements in the company’s 2018 and 2021 financial statements.
The SEC’s order found that, because the payments required by the 2019 and 2022 agreements were not recorded, WWE overstated its 2018 net income by approximately 8% and its 2021 net income by about 1.7%.
Once WWE learned of the settlement agreements, it issued a restatement of its financial statements in August 2022.
“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., associate regional director in the New York Regional Office, said in a statement.
The SEC said that McMahon, without admitting or denying its findings, agreed to cease-and-desist from violating certain provisions, pay a $400,000 civil penalty, and reimburse WWE approximately $1.3 million.
McMahon was the leader and most recognizable face at WWE for decades. When he purchased what was then the World Wrestling Federation from his father in 1982, wrestling matches took place at small venues and appeared on local cable channels.
WWE matches are now held in professional sports stadiums and the company’s weekly live television program, “Raw,” made its debut on Netflix on Monday, where it had 4.9 million views globally and averaged 2.6 million households in the US, according to VideoAmp.
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