The Securities and Exchange Commission charged former WWE boss Vince McMahon with violating federal securities laws by failing to inform his pro wrestling company’s board he had signed nondisclosure agreements that promised to pay two women $10.5 million to keep them quiet about his sexual conduct, the SEC said Friday.
McMahon, whose wife, Linda, has been nominated as Department of Education secretary by President-elect Donald Trump, agreed to settle the administrative charges and will pay a $400,000 civil penalty and reimburse the WWE $1.33 million after consenting to an order finding that he violated the Securities Exchange Act, the SEC said.
The agency said McMahon should have informed the WWE board about the nondisclosure agreements, which were made on behalf of him and the company.
McMahon, in a statement on the settlement of the SEC case, suggested that he is also no longer under criminal investigation by the Department of Justice for issues related to the women.
“The case is closed. Today ends nearly three years of investigation by different governmental agencies,” said the 79-year-old.
“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. “I’m thrilled that I can now put all this behind me.”
A source familiar with the situation said the DOJ has ended its criminal probe of McMahon and will not charge him.
But a lawyer for Janel Grant, a former WWE employee who received a settlement from McMahon in 2022, in a statement said the investigation is continuing.
“During his time leading WWE, Vince McMahon acted as if rules did not apply to him, and now we have confirmation that he repeatedly broke the law to cover up his horrifying behavior, including human trafficking,” said attorney Ann Callis, who is representing Grant in a Connecticut federal court lawsuit against McMahon, which accuses him of sexual assault and trafficking Grant.
“The SEC’s charges prove that the NDA Vince McMahon coerced Ms. Grant into signing violates the law, and therefore her case must be heard in court,” Callis said. “While prosecutors for the Southern District of New York continue their criminal investigation, we look forward to bringing forward new evidence in our civil case about the sexual exploitation Ms. Grant endured at WWE by Vince McMahon and John Laurinaitis.”
Laurinaitis, the WWE’s former head of talent relations and general manager, is a co-defendant in the suit, as is WWE.
A spokesman for the U.S. Attorney’s Office declined to comment.
McMahon’s lawyer declined to comment.
The SEC said that McMahon’s failure to tell WWE’s board, legal department, accountants or auditor about the settlements caused the company to make “material misstatements” in its 2018 and 2021 financial statements.
“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,” said Thomas Smith Jr., associate regional director in the SEC’s New York regional office.
The settlements first came to light in spring 2022 after the WWE’s board held a special meeting to discuss allegations against McMahon, the then-chairman and CEO of the company. He denied the claims.
An investigation authorized by the board within months discovered about $14.6 million in unrecorded expenses paid or to be paid by McMahon in connection with settlement agreements with five women from 2006 through 2022 that should have been recorded in WWE’s financial statements.
McMahon resigned as CEO and chairman in July 2022, and a month later WWE filed amended financial statements with the SEC for 2019, 2020 and 2021.
McMahon returned as WWE’s executive chairman in January 2023, and in September 2023 it merged with the parent company of Ultimate Fighting Championship and Endeavor Group holdings, forming a new entity, TKO Group Holdings, whose shares are traded on the New York Stock Exchange.
One of the settlement agreements detailed by the SEC obligated McMahon to pay $3 million to Grant in exchange for her silence about a relationship with him and her releasing potential legal claims against McMahon and the company.
Grant is not named in the SEC order, but her lawyer Callis identified her as the woman who signed that NDA in 2022. Grant’s lawsuit against McMahon alleges he ended up paying her only $1 million of the $3 million he had promised her.
McMahon resigned as executive chairman of TKO Group on the heels of 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 independent contractor for WWE who alleged that “McMahon assaulted her and derailed her career after she refused to engage in a sexual relationship with him” in 2005. That deal was reached in 2019.
The SEC said that because the agreements with the women were not recorded by the company, WWE overstated its net income for 2018 by about 8% and its 2021 net income by about 1.7%.
“McMahon received incentive-based compensation and realized profits from the sale of WWE common stock during the 12-month period following the filing of financial statements that WWE subsequently restated due to the facts described herein,” the SEC’s order said. “McMahon has not fully reimbursed WWE or its successor in interest for these profits and incentive-based compensation and therefore violated Section 304 of the Sarbanes-Oxley Act of 2002.”
McMahon and his wife are friends of Trump’s.
Linda McMahon served as head of the federal Small Business Administration during Trump’s first term in the White House.