Wynn Resorts accepts $41 million from him as settlement with pension fund after sex allegations

Nevada Gaming Control Board confirms it still has jurisdiction over Steve Wynn

Earlier this month, Steve Wynn filed a motion to dismiss the complaint and argued the board was overstepping its statutory authority because he’s no longer part of his namesake company.
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The board said Wednesday no section of the Gaming Control Act supports Mr. Wynn's premise, based on his withdrawal from the industry. Regulators say a licensee’s surrender of his license is only effective when the Commission accepts it. In addition, he would pay the company $20 M in damages while another $21 M will come from insurance carriers as part of a settlement stemming from shareholder lawsuits over sexual misconduct.

The Nevada Gaming Control Board Wednesday asked its regulatory counterpart to reject Steve Wynn’s attempt to sidestep a complaint that would declare him unsuitable to hold a state gaming license. On the same day, Wynn Resorts agreed to accept $41 million from its former CEO and chairman and insurance carriers as part of a settlement stemming from shareholder lawsuits accusing company directors of failing to disclose the casino mogul’s alleged pattern of sexual misconduct.

The board move sets the stage for a possible hearing before the Nevada Gaming Commission on Dec. 19. Wynn has until Dec. 9 to reply to the Control Board.

The opposition document, filed Wednesday, is the latest maneuver in the legal tug-of-war between Nevada gaming regulators and the disgraced casino mogul. Wynn resigned as chairman and chief executive officer of Wynn Resorts in February 2018 after sexual misconduct allegations against him surfaced, and sold off all his stock in the company a month later.

In October, the Gaming Control Board lodged a complaint describing Wynn as someone who is “not a person of good character, honesty, and/or integrity” and, therefore, is “unsuitable to be associated with a gaming enterprise or the gaming industry as a whole.” Wynn fired back earlier this month with a motion to dismiss the filing and argued the board was overstepping its statutory authority because he’s no longer part of his namesake company.

The Gaming Control Board disagrees, arguing it continues to have jurisdiction over him and his finding of suitability to hold a gaming license. Attorney General Aaron Ford — who authored the latest filing on behalf of the board — wrote that the “legislature’s definition of suitability has no nexus to the person’s temporal connection to a particular licensee.” Nevada law governing such investigations doesn’t use the word “jurisdiction,” set a time limit or “hamstring” it to employment status, Ford wrote, as reported by The Nevada Independent.

“Wynn seems to argue that he can unilaterally cut-off this Commission’s subject matter jurisdiction by leaving Wynn Resorts, but no section of the Gaming Control Act supports his premise,” the filing states. “Indeed, an analogous provision is to the contrary — a licensee’s surrender of his license is only effective when the Commission accepts it.

As Wynn’s exit from his casino empire nears its two-year anniversary, state gaming officials continue to deal with the aftermath while trying to ward off similar incidents in the future. The Gaming Commission assessed a record-setting $20 million fine on Wynn Resorts earlier this year for failing to properly investigate the harassment allegations. And last week the commission approved a regulation amendment that aims to bolster protections against workplace harassment and discrimination.

Wynn’s settlement with pension fund

Neither the company nor its current or former directors or officers were found to have committed any wrongdoing in connection with the pending settlement involving multiple public pension funds, the company said in a statement late Wednesday. The deal is subject to approval of a judge in Las Vegas.

Wynn would pay $20 million in damages while another $21 million will come from insurance carriers on behalf of current and former employees of Wynn Resorts, the company said, the Associated Press reports.

Wynn Resorts said the settlement reached Wednesday afternoon credits the company with $49 million for changes made since then, including new policies to protect workers and realignment of the board of directors with eight independent members, including four women.

Multiple shareholder lawsuits — consolidated into a single case in Clark County District Court in Las Vegas — were filed in 2018 on behalf of the New York public pension fund and municipal workers and others elsewhere over their investments in Wynn Resorts.

They alleged some officers and directors knew the company's founder and chairman made unwanted sexual advances on employees and pressured them to perform sex acts, but did not disclose the alleged pattern of sexual misconduct. In addition to The New York State Common Retirement Fund, other plaintiffs included an operating engineers’ construction pension fund in Pennsylvania and municipal firefighters in California.

“We filed our lawsuit in response to serious and repeated allegations of sexual misconduct by Steve Wynn and the prior board’s alleged failure to stop it,” said New York Comptroller Thomas DiNapoli, who is in charge of that state’s $209 billion retirement fund. He said it holds shares in Wynn Resorts with an estimated value of $23 million.

“We are gratified that the reforms in this agreement and those undertaken following the initiation of our lawsuit will protect Wynn resorts employees and shareholders against future harm,” he said Wednesday.

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