The Securities and Exchange Commission Former WWE boss Vince McMahon has been charged with violating federal securities laws for failing to tell the board of his pro wrestling company that he had signed nondisclosure agreements promising to pay two women $10.5 million US dollars to maintain her secret about his sexual behavior, the SEC said Friday.
McMahon, whose wife Linda was appointed Secretary of the Department of Education by President-elect Donald Trump, agreed to settle administrative costs and pay a $400,000 civil penalty and repay $1.33 million to WWE after she had agreed to this command The SEC found he violated the Securities Exchange Act, the SEC said.
The agency said McMahon must have informed the WWE board of directors in regards to the non-disclosure agreements made on his behalf and on behalf of the corporate.
In an announcement announcing the settlement of the SEC case, McMahon noted that the Justice Department was also now not prosecuting him for matters related to the ladies.
“The case is closed. “Today marks the end of almost three years of investigations by various government agencies,” said the 79-year-old.
“Ultimately, there were never more than minor accounting errors related to some personal payments I made as CEO of WWE several years ago,” McMahon said. “I’m thrilled that I can now put all this behind me.”
A source acquainted with the situation said the Justice Department has ended its criminal investigation into McMahon and won’t charge him.
But a lawyer for Janel Grant, a former WWE worker who received a settlement from McMahon in 2022, said in an announcement the investigation was continuing.
“During his time on the helm of WWE, Vince McMahon acted as if no rules applied to him, and now we have now confirmation that he repeatedly broke the law to cover up his horrific behavior, including human trafficking ” Representing attorney Ann Callis Grant said in a Connecticut federal court lawsuit against McMahon, accusing him of sexual assault and trafficking with Grant.
“The SEC’s allegations prove that Vince McMahon’s NDA forced Ms. Grant to sign in violation of the law, and her case must therefore be heard in court,” Callis said. “As prosecutors for the Southern District of New York continue their criminal investigation, we look forward to presenting new evidence in our civil case regarding Vince McMahon and John Laurinaitis’ sexual exploitation of Ms. Grant in WWE.”
Laurinaitis, WWE's former head of talent relations and general manager, is a co-defendant in the lawsuit, as is WWE.
A spokesman for the U.S. Attorney's Office declined to comment.
McMahon's attorney declined to comment.
The SEC said McMahon's failure to inform WWE's board of directors, legal department, accountants or auditor of the settlements resulted in the company making “material misstatements” in its 2018 and 2021 financial statements.
“Company executives may not enter into material agreements on behalf of the company they serve and withhold this information from the company’s control functions and auditor,” said Thomas Smith Jr., deputy regional director in the SEC’s New York regional office.
The settlements first came to light in the spring of 2022 after the WWE board of directors held a special meeting to discuss allegations against McMahon, the company's then-chairman and CEO. He denied the claims.
An investigation approved by the board within months found about $14.6 million in unrecognized expenses paid or to be paid by McMahon in connection with settlement agreements with five women from 2006 to 2022 that should have been included in WWE's financial statements must be recorded.
McMahon resigned as CEO and chairman in July 2022 and a month later, WWE filed amended financial reports with the SEC for 2019, 2020 and 2021.
McMahon returned as WWE's executive chairman in January 2023 and merged with Ultimate Fighting Championship's parent company and Endeavor Group Holdings in September 2023, creating a new company. Investments of the TKO Groupwhose shares are traded on the New York Stock Exchange.
One of the settlement agreements listed by the SEC required McMahon to pay $3 million to Grant in exchange for her keeping quiet about a relationship with him and releasing potential legal claims against McMahon and the company.
Grant is not named in the SEC order, but her attorney Callis identified her as the woman who signed this NDA in 2022. Grant's lawsuit against McMahon claims he ultimately only paid her $1 million of the $3 million he promised her.
McMahon resigned as CEO of TKO Group following Grant's lawsuit, which was filed in January 2024 in U.S. District Court in Connecticut.
The other undisclosed deal detailed in the SEC's order required McMahon to pay a former WWE independent contractor who claimed that “McMahon assaulted her and derailed her profession after she refused.” “to enter into a sexual relationship with him”. This deal was closed in 2005 2019.
The SEC said WWE overstated its 2018 net income by about 8% and its 2021 net income by about 1.7% because the agreements with the women were not recorded by the company.
“McMahon received incentive-based compensation and realized gains from the sale of WWE common stock during the 12-month period following the filing of the financial statements, which WWE later restated based on the facts described herein,” the SEC’s order states. “McMahon failed to fully reimburse WWE or his successor the interest on these winnings and incentive-based compensation, in violation of Section 304 of the Sarbanes-Oxley Act of 2002.”
McMahon and his wife are friends of Trump.
Linda McMahon served as head of the federal Small Business Administration during Trump's first term within the White House.
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