Vince McMahon, co-founder of World Wrestling Entertainment (WWE), has reached a settlement with the Securities and Exchange Commission (SEC) over undisclosed payments made to two individuals. The SEC alleged McMahon concealed payments totaling $10.5 million to prevent claims against him.
McMahon, former CEO of WWE, allegedly paid a former employee $3 million and a former independent contractor $7.5 million in hush money in 2019 and 2022. This prompted the SEC investigation, which found the payments materially impacted WWE's financial reports.
The settlement agreement requires McMahon to pay a $400,000 civil penalty and reimburse WWE $1,330,915.90. McMahon's settlement acknowledges no wrongdoing and attributes the issue to "minor accounting errors."
Consequently, WWE's reported 2018 net income was inflated by approximately 8% and 2021 net income by 1.7%. The SEC stressed the importance of transparency in financial reporting for corporate executives.
"Company executives have a responsibility to disclose all material agreements to the company and its auditors," stated SEC Associate Regional Director Thomas P. Smith Jr.
The SEC action follows allegations against McMahon, including accusations of sexual misconduct. Linda McMahon, his wife and a figure in President-elect Trump's transition team, has been recently named in a lawsuit that alleges WWE enabled years of ringside announcer abuse of young boys. Both McMahon's deny the claims.
Despite the settlement, the controversy surrounding McMahon and WWE continues to cast a shadow on the company.
