Wynn Resorts hid knowledge of sexual misconduct claims, Massachusetts regulators say

Key Points
  • The Massachusetts Gaming Commission details how Wynn Resorts handled accusations of rape and sexual misconduct against founder and former CEO Steve Wynn.
  • The commission is holding a hearing this week to determine if Wynn Resorts will be able to keep its Massachusetts gaming license, which it won in 2013.
  • The company has been working to open the Encore Boston Harbor Resort in Everett, Massachusetts. If the hearing results a lose of its gaming license, it will seriously hurt the $2.6 billion project on the Mystic River. 
A pedestrian with an umbrella walks in front of the Wynn Palace casino resort, operated by Wynn Resorts Ltd., in Macau, China, Jan. 31, 2018.
Billy H.C. Kwok | Bloomberg | Getty Images

The Massachusetts Gaming Commission accused Wynn Resorts on Tuesday of hiding allegations of rape against former CEO Steve Wynn.

The commission, which is weighing whether to revoke the company's state gaming license, made the allegation in a report detailing how Wynn Resorts handled the accusations against its former top executive. If the commission decides to revoke the license, it would jeopardize the company's $2.6 billion resort project in the Boston area. Wynn Resorts won the Massachusetts gaming license in 2013.

The regulators said they spoke with more than 100 people as part of their investigation.

In the 199-page report, parts of which were redacted, the commission said that "over the course of years, a limited group of executives and employees in positions of authority at the Company, including in the legal division, were aware of certain allegations of sexual misconduct against Mr. Wynn involving employees, but they disregarded Company policies when it came to handling those allegations."

It added: "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 against Mr. Wynn that came to their attention."

The allegations of sexual misconduct became known to the public after a January 2018 article in The Wall Street Journal said several women claimed Wynn had harassed or assaulted them. Wynn has denied the allegations though he said at the opening hearing on Tuesday that he didn't know the details of his own company's code of conduct policies. Wynn sold his entire stake in the company by March 2018, after he resigned from his position.

In response to the report, Wynn Resorts said the company has cooperated fully with the Massachusetts commission's investigation and its review over the past year, "providing thousands of pages of documentation, and allowing full access to company executives and answering every question."

The report did confirm remedial measures the company has taken in the wake of the allegations. Among them: that Steve Wynn had completely separated from the company within weeks of the allegations coming to light and that the board established a special committee that conducted an in-depth review of the allegations. Wynn didn't receive any severance when he left.

It also said "the company has implemented enhanced training and human resources policies, operations and structural changes, and new internal controls, including controls related to Company use of outside attorneys."

Wynn Resorts also said in an updated statement on Tuesday that any employee who was aware of allegations of sexual assault against Wynn are no longer with the company. This includes Wynn Las Vegas President Maurice Wooden and General Counsel Kim Sinatra.

The report says that the changes don't erase the company's corporate failures.

Wynn Resorts plans to open Encore Boston Harbor Resort in Everett, Massachusetts in June. If this week's hearing results a loss of its gaming license, the $2.6 billion project on the Mystic River will be hurt.

Wynn Resorts' name was removed from the project to distance it from the allegations against Steve Wynn.

The company's stock is up 5 percent in trading Tuesday. The shares, which have a market value of $14.3 billion, have lost about 27 percent of its value over the past year, but are up more than 34 percent since January.

The Nevada Gaming Commission also recently reviewed Wynn Resorts, assessing a record $20 million fine but allowing it to keep its casino license.

— CNBC's Contessa Brewer contributed to this report.