- From 2012 to 2016, Wynn Resorts placed Stephen Wynn at the center of the brand’s success, citing his experience in the industry and his role in creating iconic casinos.
- In January 2018, The Wall Street Journal reported sexual harassment allegations against Steve Wynn, based on interviews with more than 150 current and former employees.
- The Wall Street Journal article sparked investigations by the Massachusetts and Nevada gaming commissions, both of which found Wynn guilty of misconduct and implicated high-ranking officials in a cover-up, resulting in fines of $55 million.
- Wynn Resorts’ stock price fell 18% in just a few days after the scandal story was published.
- Investors sued Wynn Resorts for failure to disclose Stephen Wynn’s misconduct and related proceedings.
- Wynn Resorts agreed to pay a $70 million settlement to shareholders to resolve the lawsuit. Affected investors can now submit a complaint to receive their payment.
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Stephen Wynn: a visionary in the development of high-end casinos
Stephen Wynn was a highly respected figure in the casino industry and played a key role in the development of some of the world’s most famous casinos, including the Mirage, Treasure Island, Bellagio, Wynn and Encore in Las Vegas. Wynn also had political influence, having served as chairman of the Republican National Committee’s finance committee.
As of January 2018, Wynn owned nearly 12% of Wynn Resorts, valued at $2.4 billion. The company has always expressed confidence in his leadership, highlighting his deep industry knowledge, experience and ability to attract high-end clients. For years, he was considered the driving force behind Wynn Resorts.
The Wall Street Journal publishes allegations against Stephen Wynn
Another former masseuse accused him of exposing himself during private interviews and pressuring her to have sex. He gave her $1,000 in cash after each session.
In the early 1990s, former Golden Nugget executive Dennis Gomes reportedly reported frequent complaints about Stephen Wynn’s sexual harassment of female employees, revealing a disturbing pattern of misconduct.
At first, Mr. Wynn denied the allegations, saying: “The idea that I ever assaulted a woman is grotesque.” The company also denied the allegations and said they were made up by Wynn’s ex-wife, Elaine Wynn.
Findings from the MGC and NGC investigations
After the Wall Street Journal’s revelations, authorities such as the Massachusetts Gaming Commission and the Nevada Gaming Commission opened investigations into the sexual harassment allegations. As a casino owner, Wynn Resorts is subject to strict regulations, and failure to meet these standards could risk its gaming license and damage its reputation. Both commissions found Stephen Wynn guilty of misconduct and revealed that senior executives knew about and covered up the problems.
As a result, Wynn Resorts had to pay considerable fines. The Nevada Gaming Commission imposed a record $20 million fine, and the Massachusetts Gaming Commission fined the company $35 million. Additionally, the MGC fined Wynn Resorts Chairman Matthew Maddox $500,000.
Stock market reaction and investor lawsuits
Many market analysts said Stephen Wynn’s departure would have a significant impact on Wynn Resorts’ brand image and cast doubt on its future plans.
Corporate bookings, which make up a significant part of Wynn Resorts’ business, have been hit as major brands have avoided partnering with Wynn hotels to avoid reputational risks.
“If I were PepsiCo, I would stay away right now,” says John Blank, chief equity strategist at Zacks Investment Research.
After the harassment allegations, the NBA ended its ties with Wynn Resorts, and concerns began to be raised that the company could potentially lose its gaming licenses in Nevada, Massachusetts and Macau.
Additionally, after the scandal and the stock’s sharp decline, investors sued Wynn Resorts and its management, alleging that they withheld information about Stephen Wynn’s sexual harassment and the company’s internal problems. .
Solve the case
To resolve the lawsuit filed by investors, Wynn Resorts agreed to a $70 million cash settlement. If you have invested in Wynn Resorts, you may be eligible for a portion of this settlement for recover your losses.
Since its 2018 scandal, Wynn Resorts has made progress in rebuilding its brand and expanding globally. The company secured its first gaming license in the UAE for a luxury resort planned to open in 2027, reduced its debt by $1.2 billion and launched a $1 billion share buyback program. Under the leadership of Chief Executive Craig Billings, Wynn has focused on restoring its reputation and creating long-term shareholder value. However, its stock is still well below its pre-scandal level, trading at $93 in November 2024, a 51% decline from $192 in 2018.
Viewed the management’s handling of the situation?
Sure! Here are some potential interview questions for the guests on the topics covered in the article:
1. Thematic Section: Introduction of Stephen Wynn and his role in the company:
Guest 1: Could you please tell us about Stephen Wynn and his role in the development of Wynn Resorts? What made him a significant figure in the casino industry?
Guest 2: Absolutely! How did Stephen Wynn’s leadership and vision contribute to Wynn Resorts’ success over the years? Can you share some examples of iconic casinos he played a key role in creating?
2. Thematic Section: The Wall Street Journal’s report on sexual harassment allegations against Stephen Wynn:
Guest 1: Could you elaborate on the sexual harassment allegations against Stephen Wynn that were published by The Wall Street Journal in 2018? What were some of the specific accusations made by former employees?
Guest 2: How did the company and Wynn himself respond to these allegations initially? Did they take any steps to address the situation internally or externally?
3. Thematic Section: The Impact of the Scandal on Wynn Resorts:
Guest 1: Could you discuss the impact of the sexual harassment scandal on Wynn Resorts’ reputation, business operations, and stock price? How did this affect their relationships with key stakeholders like corporate partners and investors?
Guest 2: What measures did Wynn Resorts take to address the fallout from the scandal, and how have they fared in rebuilding their public image since then? Has there been any long-term damage to their brand as a result of this controversy?
4. Thematic Section: Legal Consequences and Investor Lawsuits:
Guest 1: What were some of the legal consequences faced by both Stephen Wynn and Wynn Resorts following the scandal? How did these investigations and fines impact their ability to operate and maintain their gaming licenses?
Guest 2: How did investors react to the scandal and subsequent lawsuits? Can you explain the process of reaching a $70 million settlement with shareholders and how investors
