WWE announced that it has settled a class action lawsuit initiated by a group of investors over alleged violations of securities law. The lawsuit accused WWE, WWE CEO Vince McMahon, and former WWE executives and corporate directors George Barrios and Michelle Wilson of making false and materially-misleading statements to investors about the company’s Saudi Arabia deal.
The complaint, filed in March of this year, alleged that WWE painted a rosier-than-accurate picture of the company’s relationship with the Saudi government, and consequently, investors were unaware of the true financial risks that the company faced from that deal. At the same time, McMahon, Barrios, and Wilson were among several executives who sold shares which were, as a result of the fraudulent statements, over-valued.
In 2019, the Saudi government refused to make millions of dollars in payments owed to WWE, and negotiations with the government-owned OSN network were floundering. The breakdown in the relationship culminated after the Crown Royal event, held in the country in October 2019. Vince McMahon reportedly cut the broadcast feed in that country, and in retaliation, the plane carrying several members of the company’s talent roster was grounded, effectively holding the talent hostage.
The class action suit, initiated by the City of Warren (Michigan) Police and Fire Retirement fund, sought damages for losses suffered on the investments as a result of the defendant’s actions.
Today’s announcement notes that the settlement, totaling $39MM USD “… will include a full release of all Defendants in connection with the allegations, and will not contain any admission of liability or admission as to the validity or truth of any or all allegations or claims by any of the Defendants.” It is expected that the entire amount will be paid for by WWE’s insurance carriers.
“The Company believes,” the announcement concludes, “that resolving the matter is the right business decision and that it is prudent to end the protracted and uncertain class action process.”
