New York City’s five public pension funds have joined a lawsuit spearheaded in February by the state comptroller’s office against Wynn Resorts, alleging the company’s leadership were aware of former CEO Steve Wynn’s alleged sexual misconduct but failed to address it, the city’s law department and comptroller, Scott Stringer, announced Monday.
The funds join state pension funds in bringing the derivative lawsuit in Nevada. The city’s pensions hold approximately $35 million worth of stock in Wynn Resorts. Collectively, the city and state funds claim $75 million in shares.
“As alleged in the complaint, the NYC Pension Funds have joined this action because the leadership of Wynn Resorts turned a blind eye to, and covered up, misconduct that lasted for decades,” Corporation Counsel Zachary Carter said in a statement. “Accordingly, this lawsuit seeks to hold the board and its directors accountable for failing to meet their fiduciary obligations to shareholders.”
According to the now-amended complaint, the company’s board and top leadership “tacitly permitted and eventually covered” Wynn’s “decades-long pattern” of “unchecked” sexual abuse and harassment. Their actions were, according to the complaint, a breach of loyalty and fiduciary duty to stockholders.
Allegations against Wynn became public after a series of articles in the Wall Street Journal detailed claims by employees that led to what the complaint called “an atmosphere of terror” created by Wynn at the company. The company’s leadership allegedly knew of specific assaults and settlement payments, according to the complaint.
Wynn Resort’s leadership also failed to hold Wynn himself accountable even after the allegations against him became public, failing to take any disciplinary action against him before he left, according to the complaint.
A Wynn Resorts spokesman declined to comment.
Wynn resigned in February. According to reports, he has denied the misconduct accusations. The company’s stock has taken a hit, the complaint notes, with losses exceeding 20 percent, and trouble from gaming regulators brewing in Massachusetts, Nevada and Macau, which have launched investigations.
Representative for the office of the city comptroller declined to comment. Cohen Milstein Sellers & Toll represents both parties in the matter as outside counsel.