US judge revives class-action claim in Wynn Resorts lawsuit

LAS VEGAS — A federal judge in Nevada has revived elements of a securities fraud lawsuit seeking class-action status for allegations that executives at Wynn Resorts Ltd. knew about, but disregarded, reports of sexual harassment and misconduct against company founder Steve Wynn.

U.S. District Judge Andrew Gordon ruled the case can go forward alleging that Steve Wynn, board members and top executives at his Las Vegas-based company violated Securities and Exchange Commission laws and rules through “material misrepresentations and omissions.”

Wynn has denied allegations that became public in January 2018 with a Wall Street Journal report about dozens of casino employees describing, as the judge noted, “behavior that cumulatively would amount to a decades-long pattern of sexual misconduct.”

The former casino mogul, now 79, resigned as company chief executive and board chairman shortly after the Journal article appeared and has multiple ongoing court fights.

His attorneys in the current case, Colby Williams in Las Vegas and Michelle Johnson and Colleen Smith in California, declined to comment about Gordon’s order.

A different federal judge dismissed the complaint in May 2020 but allowed plaintiffs to amend and refile the case.

It seeks unspecified damages for unnamed holders of Wynn stock that plunged more than 17% after misconduct allegations became public.

“The court’s decision underscores the fact that alleged sexual misconduct and harassment by corporate executives are material issues for investors, especially when management turns a blind eye to reports of wrongdoing,” said Murielle Steven Walsh, attorney for the plaintiffs.

Wynn Resorts spokesman Michael Weaver said in a statement that the company looks forward to the case “moving beyond the allegation stage.”

Wynn Resorts owns and operates casinos in Las Vegas, Massachusetts and the Chinese gambling enclave of Macau.

In February 2019, the Nevada Gaming Commission fined the company a record $20 million for failing to investigate claims of sexual misconduct against Wynn before he resigned.

In April 2019, the Massachusetts Gaming Commission fined Wynn Resorts $35 million for executives’ failure to disclose years of allegations of sexual misconduct against Steve Wynn. It also fined CEO Matt Maddox $500,000 for a “clear failure” to investigate at least one misconduct complaint.

from Boston Herald https://ift.tt/3jgEpBW