Ex-WWE CEO Vince McMahon settles SEC case for $400K

Vince McMahon, the former chief executive officer of World Wrestling Entertainment Inc., hid hush-money settlements he negotiated with a former employee and company contractor, leading to incorrect financial statements in 2018 and 2021, the Securities and Exchange Commission alleged Friday.

McMahon, without admitting to or denying the SEC allegations, agreed to pay a $400,000 civil penalty and reimburse WWE $1.3 million, the SEC said.

"In the end, there was never anything more to this than minor accounting errors with regard to some personal payments that I made several years ago while I was CEO of WWE," McMahon said in an emailed statement. "I'm thrilled that I can now put all this behind me."

McMahon and his wife, Linda McMahon, built the family's professional-wrestling organization into a colossus over the course of decades. The company, formerly known as the World Wrestling Federation, loomed large in pop culture, churning out stars like Hulk Hogan and Dwayne "The Rock" Johnson. President-elect Donald Trump has selected Linda McMahon as his nominee for education secretary. 

McMahon resigned as WWE's CEO in 2022 following misconduct allegations and secret payments described in a Wall Street Journal report. A month later, the company said it identified about $14.6 million in previously unrecorded expenses related to the former CEO's settlements. 

Additional details emerged Friday in the SEC's cease-and-desist order. According to the regulator, a former independent contractor alleged McMahon assaulted her in 2005 and derailed her career after she refused to engage in a sexual relationship with him. In 2019, McMahon agreed to pay her $7.5 million over five years in exchange for agreeing not to disclose her allegations against him, the SEC said.

In another pact, McMahon agreed to pay a former employee $3 million over five years so she'd stay silent about a personal relationship they had from at least 2019 to 2022, according to the SEC.

In both cases, McMahon signed the agreement for himself as well as on behalf of WWE, but he never shared details with the company's legal and accounting departments, board of directors, lawyers or its outside auditor, the SEC said. Deloitte & Touche LLP had served as the company's auditor since 1999, according to regulatory filings. 

Keeping the agreements silent kept them off the company's books, which led to WWE overstating its 2018 net income by about 8% and its 2021 net income by 1.7%, according to the SEC.

"Company executives cannot enter into material agreements on behalf of the company they serve and withhold that information from the company's control functions and auditor," Thomas Smith Jr., associate regional director in the SEC's New York Regional Office, said in a statement.

McMahon recently has faced allegations of misconduct, with a former WWE employee suing her former boss. McMahon's attorney said last year she was confident that evidence would prove the allegations are false.