Wynn Resorts is not having a good time at the moment. Due to the sexual misconduct allegations against the company’s founder and former-CEO, several shareholders have reportedly filed lawsuits against the company. The shareholders are apparently angry that the board was unable to keep the CEO’s behaviour in check.
Shareholder Lawsuits From Nevada & New York
Lawsuits against the company began piling up earlier this week. There were already two lawsuits out of Nevada, but these were joined by a class action lawsuit from New York. Because the latest shareholder lawsuit is a class action, any additional shareholders who feel angered by the way the situation was handled can easily join the case.
As we all know by now, Steve Wynn resigned as CEO of Wynn Resorts in early February, following a Wall Street Journal article accusing him of decades of sexual misconduct. While Wynn denied the allegations, he was still left with no alternative but to resign as CEO. Two investors began the class action lawsuit saying that his alleged behaviour had caused the share price to plummet. This, in turn, caused them serious financial issues.
Shareholders Complain about Share Price Drop
On the 6th of February, the share price for Wynn Resorts dropped by $20, from $200 to $180. This was the direct result of a report that the Massachusetts Gaming Commission had started conducting a sustainability investigation into the company. This investigation caused concern for investors, as it could put the company’s Massachusetts gaming licence in danger. Wynn Resorts is currently building a $1.6 billion casino resort in the state.
Things got even worse a week later when another two women came forward with more allegations. They said they had been sexually assaulted back in the 1970s. This caused share prices to fall even further, down to $164. This week the new CEO, Matt Maddox, denied any knowledge of these allegations until he saw the Wall Street Journal article. The lawsuits are also saying that some board members must have known and should have done something.