Vince McMahon & WWE sued for fraud

Vince McMahon & WWE sued for fraud

Vince McMahon, Stephanie McMahon, Triple H and multiple other WWE executives are being sued regarding claims of selling more than $300 million worth of stock at inflated prices, while failing to disclose knowledge of collapsing deals in the Middle East.

The lawsuit, which can be viewed in full here, accuses McMahon, other WWE executives and nominally WWE as a whole of telling investors that the promotion had been set to renew an agreement with Orbit Showcase Network (OSN) in Riyadh. However, OSN would leave sports broadcasting, which the lawsuit alleges WWE had prior knowledge of. The lawsuit also alleges WWE misled investors about the chances of finding a replacement broadcasting arrangement. McMahon sold 3.5 million shares - worth over $280 million - on the alleged bases of "non-public information regarding the company’s key contracts, business metrics, and financial prospects" in the increasingly “critical” Middle East territory. Other WWE executives also sold stock worth $30 million based on the same inside information. The complaint says that WWE's stock price fell more from $62 a share to just over $44 when the truth about the lack of a deal in the Middle East, and WWE's "rapidly deteriorating" business in the region, finally came out. The cause of action is listed as "Breach of fiduciary duty; unjust enrichment; aiding and abetting" with the plaintiff seeking "punitive and actual damages, costs, and fees" in relief. This is not the first time WWE have faced legal action in regard to their dealings in the Middle East. Multiple lawsuits have been filed with allegations of the promotion making false and misleading claims regarding its relationship with Saudi Arabia. One such lawsuit was settled in 2020 for $39 million.

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Last modified on Thursday, 17/06/2021

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