Massachusetts Regulators Say Wynn Executives Concealed Misconduct Allegations

Regulators in Massachusetts say Wynn Resorts failed to follow its own procedures when handling sexual misconduct allegations against founder and former CEO Steve Wynn, and in some cases helped to conceal those accusations.

The findings were released in an investigatory report carried out by the Investigations and Enforcement Bureau of the Massachusetts Gaming Commission, which is examining Wynn’s suitability to hold a casino license at its new US$2.5 billion Encore Boston Harbor property, scheduled to open in June.

The commission will begin a three-day hearing on the matter from Tuesday. The report comes at a sensitive time for Wynn, as the company is vying for a casino license in Japan amidst stiff competition.

“The Investigations and Enforcement Bureau investigation shows that over a course of years, a limited number of executives and employees in a position of authority at the company, including in the legal department, were aware of certain allegations of sexual misconduct against Mr. Wynn involving employees, but they disregarded company policy when it came to handling those allegations,” the report says.

“The investigation also shows that in some instances, particular company executives, with the assistance of outside counsel, were part of affirmative efforts to conceal allegations again Mr. Wynn that came to their attention,” it adds.

Regulators will now consider whether to reverse a prior recommendation that found Wynn suitable to run the Massachusetts IR. The report mentioned that Wynn executives had been aware of certain allegations prior to the license being awarded in 2014, but had failed to disclose them.

The report, however, points out that since the allegations surfaced and Steve Wynn resigned in early 2018, there has been a significant overhaul of both the management and board at the operator. Of the eleven original qualifiers, only current President and CEO Matthew Maddox and its major shareholder Elaine Wynn remain.

The report also concluded that the firm’s financial suitability has not been affected.

However, it did note that the changes do not erase the fact there have been significant and repeated failures in its corporate governance, and regulators should evaluate the “entirety of the company’s response” in light of the evidence in the report. (AGB)