Wynn Resorts stock is plunging after allegations of CEO Steve Wynn engaged in sexual misconduct for years. The stock has tumbled more than 10% since the week ended January 26.
The Wall Street Journal, which broke news of the sexual misconduct allegations, said a dozen current and former employees spoke of “behavior that cumulatively would amount to a decades-long pattern of sexual misconduct.”
Wynn has denied the allegations, calling the claims “preposterous” in statements. The resort claims that the Journal’s report is a reflection of claims his ex-wife made in court as part of a legal battle with the company and her former husband.
“We find ourselves in a world where people can make allegations, regardless of the truth, and a person is left with the choice of weathering insulting publicity or engaging in multi-year lawsuits. It is deplorable for anyone to find themselves in this situation,” Wynn said in a statement.
Although the company appears to be standing by Wynn, it has still established a special committee to investigate the claims.
A manicurist who worked at the flagship casino recalled an incident in 2005 where she claims Wynn forced her to have sex in his office. She reportedly received a $7.5 million in a settlement after complaining about the incident.
The Journal spoke to more than 150 past and current employees. The majority were apprehensive of speaking to the media in fear of losing their careers. Wynn is a powerful influence in the casino industry and the state of Nevada as a whole.
The allegations, according to Wynn, were stirred up by his ex-wife, who is pursuing a revised divorce settlement. Wynn’s ex-wife said the claim that she instigated the article is “just not true.”
Wynn himself has said his ex-wife has “threatened to slander and destroy” him. He said he is not surprised that the media is being used to allegedly advance that agenda.
The company said it has implemented an anonymous hotline that allows employees to make complaints about sexual misconduct or harassment. In a statement, the company said “Since the inception of the company, not one complaint was made to that hotline regarding Mr. Wynn.”
Wynn Resorts said in a statement to CNBC:
“The recent allegations about Mr. Wynn reflect allegations made in court hearings by Mr. Wynn’s ex-wife, Elaine Wynn, in her legal battle with him and the company. It is clear that Mr. Wynn’s ex-wife has sought to use a negative public relations campaign to achieve what she has been unable to do in the courtroom: tarnish the reputation of Mr. Wynn in an attempt to pressure a revised divorce settlement from him.”
In light of the allegations, the Massachusetts Gaming Commission said it will be reviewing a $1.13 billion development project that was set to open next year. The Commission said it is aware of the allegations and is taking them very seriously.
CNN Money says Wynn is the first CEO of a major publicly-traded company to face such allegations of sexual misconduct. They estimate that Wynn has lost more than $425 million from the allegations, as shares have plunged over the last week.