Wynn shares tumble 10% after reports of 'decades-long pattern of sexual misconduct' by CEO Steve Wynn

Key Points
  • A Wall Street Journal report that billionaire casino mogul Steve Wynn engaged in sexual misconduct over many years slams the casino company's stock.
  • Wynn says "the idea that I ever assaulted any woman is preposterous."
  • The company says the report reflects allegations made in court by his ex-wife "in her legal battle with him and the company."
WSJ reporter: Wynn ex-wife not behind helping to expose sexual misconduct claims

Wynn Resorts stock plunged more than 10 percent Friday after The Wall Street Journal reported allegations that billionaire CEO Steve Wynn engaged in sexual misconduct over many years.

The Journal said dozen current and former employees "told of behavior that cumulatively would amount to a decades-long pattern of sexual misconduct." Some described being pressured into performing sex acts with him.

In statements, Wynn denied he had ever assaulted anyone, and his company said the newspaper report reflects allegations made in court by his ex-wife "in her legal battle with him and the company."

Still, Wynn Resorts formed a special committee to investigate the allegations, according to a board statement.

According to the Journal, Wynn would regularly have manicures, makeup applications and massages performed at his office at the Wynn resort in Las Vegas. Former employees say they would schedule fake appointments for female workers to avoid requests for those services, the report says.

Wynn shares drop on reports of sexual misconduct by CEO Steve Wynn

A manicurist who worked at Wynn's flagship casino recounted an incident with Wynn in 2005, telling the newspaper that he forced her to have sex in his office. Colleagues recounted her returning to the on-site salon visibly distressed, the report says, and she told others Wynn pressured her to take her clothes off and lie on the massage table kept at his office. Those people she told about the incident recounted to the newspaper that the manicurist did not want to have sex with Wynn, but said he was persistent in his demands.

The WSJ said it contacted over 150 current and former employees. The majority of those who spoke worried that talking to the media would hurt their job opportunities, citing Wynn's vast and powerful influence throughout Nevada and the casino industry.

In a statement, Wynn said that "the idea that I ever assaulted any woman is preposterous."

"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 the statement.

He claimed the accusations were stirred up by his ex-wife, Elaine, who he said is seeking a revised settlement of their divorce. "I have repeatedly refused to capitulate to her demands," he added. "In response, I remain focused on Wynn Resorts, our employees and our shareholders and will not be distracted from those efforts."

Wynn, who also acts as finance chairman of the Republican National Committee, would not comment on whether he would relinquish his role with the RNC, the Washington Post reported.

"Neither Mr. Wynn nor the company have any comment on that," a Wynn Resorts spokesperson told the Washington Post.

Wynn Resorts provided the following 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.

It is noteworthy that although Ms. Wynn says she knew about the 2005 allegations involving Mr. Wynn in 2009, she never made them known to the board of directors, of which she was then a member, and she did not raise them until after Mr. Wynn remarried and the shareholders of Wynn Resorts voted not to elect her to the board.

Wynn Resorts is committed to operating with the highest ethical standards and maintaining a safe and respectful culture that has made Wynn Resorts the employer of choice for 23,000 employees worldwide. The Company requires all employees to receive annual anti-harassment training and offers an independent hotline that any employee can use anonymously, without fear of retaliation. Since the inception of the company, not one complaint was made to that hotline regarding Mr. Wynn.

In the aftermath of the explosive report, the Massachusetts Gaming Commission announced it would review a $1.13 billion development project set to open in Everett, Massachusetts next year.

The Wynn Boston Harbor project, which aims to transform the site of a former Monsanto chemical plant into a casino, has survived numerous legal battles with neighboring towns. In light of the allegations against Wynn, it may now may face one more.

Massachusetts Gaming Commission provided the following statement to CNBC:

The Commission is now aware of and is taking very seriously the troubling allegations detailed in the Wall Street Journal article. The suitability and integrity of our gaming licensees is of the utmost importance, and ensuring that suitability is an active and ongoing process. Consequently, the MGC's Investigations and Enforcement Bureau will conduct a regulatory review of this matter to determine the appropriate next steps.

A Wynn Resorts spokesperson told CNBC, the company intends to comply fully with the regulatory review process.

"We have been in contact with the Massachusetts Gaming Commission, and will be fully cooperative with any review the commission chooses to undertake," the spokesperson said.

Elaine Wynn and her legal team did not immediately respond to CNBC's request for comment.

Read the full report from The Wall Street Journal here.

—CNBC's Chloe Aiello and Reuters contributed to this report.