Wynn Resorts
“We feel strongly about this case
and we always believe in fighting the good fight.”
Murielle Steven Walsh
Murielle Steven Walsh
On March 1, 2023, Pomerantz, as Lead Counsel, achieved class certification in a securities class action against Wynn Resorts alleging a decades-long pattern of sexual abuse and harassment by the company’s founder and Chief Executive Officer, Stephen (Steve) Wynn that was unchecked, tacitly permitted, and eventually covered up by defendants.
Wynn Resorts owns and operates luxury hotels and destination casino resorts, including Wynn Las Vegas and Encore in Las Vegas, Nevada, Wynn Macau and Wynn Palace in Macau, China, and Wynn Boston Harbor in Everett, Massachusetts.
On January 26, 2018, the Wall Street Journal published an article titled “Dozens of People Recount Pattern of Sexual Misconduct by Las Vegas Mogul Steve Wynn,” revealing detailed accounts that Wynn had coerced and pressured several Wynn Resorts employees to perform sex acts. According to the Journal, “dozens of people… who have worked at Mr. Wynn’s casinos told of behavior that cumulatively would amount to a decades-long pattern of sexual misconduct by Mr. Wynn.” It was further revealed that Wynn had paid a Wynn Resorts employee $7.5 million after being accused of forcing the employee to have sex with him. Following these revelations, the Massachusetts Gaming Commission announced that it would open a regulatory review into the company over the sexual misconduct allegations reported in the Wall Street Journal article.
On this news, Wynn Resorts’ share price fell $20.31, or 10.12%, to close at $180.29 on January 26, 2018.
On that same day, the Board of Directors of Wynn Resorts announced the formation of a Special Committee of the Board comprised solely of independent directors to investigate the allegations contained in the Wall Street Journal article.
On February 6, 2018, the company issued a press release entitled “Wynn Resorts CEO Steps Down,” announcing the immediate resignation of Steve Wynn as the company’s CEO and Chairman of the Board of Directors.
On February 13, 2018, post-market, media outlets reported that two women had filed new sexual misconduct reports concerning Wynn with the Las Vegas Metropolitan Police Department, alleging that Steve Wynn had sexually assaulted them in the 1970s. One woman reported that Wynn assaulted her in Las Vegas and the other said she was assaulted in Chicago, the Las Vegas Metropolitan Police Department said in a statement.
On this news, Wynn Resorts’ share price closed at $164.16 on February 14, 2018, a decline of $36.44, or 18.16%, from the company’s January 25, 2018 closing price.
The complaint alleges that throughout the Class Period, Steve Wynn had been engaging in egregious sexual misconduct against the company’s female employees, that Wynn’s senior management was actively covering up his conduct, and that the company failed to report the misconduct to gaming regulators, as legally required. While all this was happening, the company was falsely assuring investors that it was committed to enforcing legal and ethical conduct, and at one point outright publicly denied that it had withheld information from regulators.
On May 27, 2020, the court granted the defendants’ motion to dismiss, but granted Pomerantz leave to amend. The Firm filed a Second Amended Complaint on July 3, 2020.
The plaintiffs’ Second Amended Complaint challenged four sets of misstatements: i) the Company’s Code of Conduct, which stated that the Company enforced ethical and legal conduct among its employees; ii) statements that the Company believed it was in compliance with all applicable legal regulations; iii) a 2016 press release by the Company denying allegations by Steve Wynn’s ex-wife that Wynn had engaged in misconduct and that the Company was withholding information from gaming regulators; and iv) statements issued by the Company and Steve Wynn in response to the WSJ article denying the WSJ allegations and claiming that the Company had a hotline in place for reporting harassment and similar misconduct (and that no reports had been filed, thereby implying that no sexual misconduct had occurred).
On July 28, 2021, Pomerantz achieved a significant win for Wynn investors when U.S. District Judge Andrew P. Gordon of the District of Nevada denied, in part, the defendants’ motions to dismiss the Second Amended Complaint upholding the plaintiffs’ claims based upon the 2016 and 2018 press releases and the “hotline” statements, but dismissing the claims regarding the first two categories of statements.
"At this stage, the plaintiffs have sufficiently alleged that Wynn, Maddox, Sinatra and Cootey were aware of information contradicting their statements that denied misconduct allegations," according to Judge Gordon. "The inference that these defendants were aware of Wynn's alleged misconduct at the time of their statements is cogent and compelling."
Pomerantz Partner Murielle Steven Walsh, who leads the litigation, stated, "We are pleased that the court upheld claims that arose from statements made by the company and Steve Wynn that effectively denied any wrongdoing by Wynn. The court's decision underscores the fact that alleged sexual misconduct and harassment by corporate executives are material issues for investors, especially when management turns a blind eye to reports of wrongdoing. This type of misconduct poses a threat to a company's financial success."
“The decision sends a stark message to corporations and their boards,” according to Managing Partner Jeremy A. Lieberman, “that in the twenty-first century, the securities laws will be applied to all matters of import to investors, particularly relating to sexual harassment and ensuring a safe work environment for employees.”
Pomerantz’s Wynn Resorts litigation is led by partners Murielle Steven Walsh and Jeremy A. Lieberman, with attorneys Emily C. Finestone and Dean P. Ferrogari
Ferris, et al. v. Wynn Resorts Ltd., et al., No. 2:18-cv-00479 (S.D.N.Y.)
Class Period: February 28, 2014 to February 12, 2018, both dates inclusive
For violations of the Securities Exchange Act of 1934