WWE co-founder and former CEO Vince McMahon and the Securities and Exchange Commission (SEC) have reached an agreement after a years-long investigation into undisclosed settlements.
The federal investigation was launched into whether McMahon disclosed to the company’s board and others that he had signed two settlement agreements worth more than $10 million with two women so that they do not reveal potential claims against himself and WWE.
The SEC said McMahon, without admitting or denying his findings, agreed to stop violating certain provisions, pay a $400,000 civil penalty and repay WWE approximately $1.3 million.
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WWE Chairman and CEO Vince McMahon speaks during a press conference announcing the WWE Network during International CES 2014 at the Encore Theater at the Wynn Las Vegas in Las Vegas on January 8, 2014. (Ethan Miller/Getty Images)
McMahon released a statement Friday, saying the situation was the result of “minor accounting errors.”
“The case is closed. Today ends nearly three years of investigation by different government agencies. There has been a lot of speculation about what exactly the government was investigating and what the outcome would be. As shown in the “Today’s resolution, much of this speculation was misguided and misleading,” the statement read. “Ultimately, there was never anything other than minor accounting errors regarding some personal payments I made several years ago while I was CEO of WWE. I am pleased to now be able to put all this behind me.”
Federal prosecutors declined to comment.
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SEC officials said Friday that one agreement was signed in 2019 and the other in 2022. One agreement required McMahon to pay $3 million to a former employee in exchange for the former employee’s agreement to not disclosing his relationship with McMahon and his release from potential claims against WWE. and McMahon.
The other agreement required McMahon to pay $7.5 million to a former WWE independent contractor in exchange for the independent contractor’s agreement not to disclose his allegations against McMahon and his release from potential claims against the WWE and McMahon, according to the SEC.
WWE owner Vince McMahon enters the arena during WrestleMania at AT&T Stadium in Arlington, Texas on April 3, 2022. (Joe Camporeale-USA TODAY Sports)
McMahon stepped down from his role as chairman and CEO of the popular professional wrestling promotion in 2022, pending the results of an internal investigation stemming from allegations of secret deals. His daughter Stephanie McMahon assumed management duties from her father.
A few weeks after his resignation, McMahon announced his intention to retire from WWE. He returned as executive chairman in 2023, but resigned from TKO – a company formed from a merger between WWE and Zuffa, the UFC’s parent company – in 2024. McMahon’s resignation came after a former employee filed a federal lawsuit accusing him and another. former executive for serious sexual misconduct.
McMahon maintained that he did not commit any wrongdoing after the complaint was filed.
WWE Chairman and CEO Vince McMahon attends a press conference to announce WrestleMania XXIX at MetLife Stadium in East Rutherford, New Jersey on February 16, 2012. (John W. Ferguson/WireImage)
By failing to disclose the agreements to the WWE Board of Directors, legal department, accountants, financial reporting staff or auditors, McMahon circumvented the company’s internal accounting controls system and caused anomalies material in its 2018 and 2021 financial statements, the commission said.
The SEC order found that because 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 approximately 8%. ‘around 1.7%.
Once WWE became aware of the settlement agreements, it released a restatement of its financial statements in August 2022.
