Stockholders file class action lawsuit against Wynn Resorts
Plaintiffs say Steve Wynn scandal tanked company stock
Legal troubles continue to mount for Steve Wynn and the company that bears his name.
A group of stockholders have filed a class action lawsuit against Wynn Resorts, claiming the company gave false and misleading statements regarding Wynn’s sexual misconduct allegations. The investors, headed by lead plaintiffs John and Joan Ferris, say that the scandal tanked the stock’s value. The lawsuit also names Steve Wynn’s successor, Matthew Maddox, as a defendant.
On January 26, the Wall Street Journal reported that Wynn had forced one of his employees, a manicurist, to have sex with him. The article said that Wynn ordered her to take her clothes off and lie down on the massage table he kept in his office. The woman refused, telling Wynn that she was married. Wynn persisted, and they ended up having sex, according to the report. A series of separate accusations against Wynn followed the article’s publication, and two more women have filed assault complaints in Nevada.
Wynn has denied the allegations, saying: “The idea that I ever assaulted any woman is preposterous.”
Wynn Resorts stock dropped more than 10 percent shortly after the sexual misconduct allegations were reported.
The lawsuit is the third class action complaint filed against Wynn Resorts since the scandal broke. Earlier this month, the Massachusetts pension fund Norfolk County Retirement System sued Wynn Resorts for having “turned a blind eye” to the allegations, it alleged. Then came a similar lawsuit filed by the Operating Engineers and Construction Pension Fund, which is based in Pennsylvania.
In the stockholder class action, the plaintiffs claim Wynn Resorts breached its fiduciary duty. The suit alleges that the company deliberately misled the public and artificially inflated stock value.
“Defendants engaged in a plan, scheme, conspiracy and course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices and courses of business which operated as a fraud and deceit upon Plaintiffs,” the suit alleges.
The allegation in the the Journal report was revealed through a lawsuit that Elaine Wynn, Steve Wynn’s ex-wife and co-founder of both Wynn Resort and Mirage Resorts, filed to lift restrictions on the sale of her stocks. Steve Wynn stepped down as CEO earlier this month .