Wynn officials hid sexual harassment claims, probe finds

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NEW YORK (BLOOMBERG) - Executives at Wynn Resorts hid from Massachusetts gaming authorities allegations that Steve Wynn sexually harassed women, investigators working for the regulator said in a report on Tuesday (April 2).

The report also calls into question the conduct of Elaine Wynn, a former board member, ex-wife of Steve Wynn and largest individual shareholder in the company.

The investigators recommended that the commission consider what Elaine Wynn knew in 2009 about Steve Wynn's US$7.5 million settlement over a 2005 rape allegation, "and evaluate whether or not her communication to the company's general counsel adequately satisfied her fiduciary obligations as a director, given the documents in her possession at the time," according to the report.

A spokesman for Elaine Wynn did not immediately respond to a request for comment.

The report also recommended that commission examine the conduct of board members Patricia Mulroy and Clark Randt, as well as current chief executive officer Matt Maddox, after Elaine Wynn first mentioned misconduct in a 2016 court filing.

The investigators said executives "bearing the most responsibility for the corporate failures have been replaced."

The report will guide the Massachusetts Gaming Commission as it considers whether to revoke Wynn Resorts' licence in the state.

The company is planning to open the US$2.6 billion (S$3.5 billion) Encore Boston Harbour resort in June. It is the only casino in the Boston area.

Wynn, the company's founder and former chief executive officer, stepped down in February 2018 following reports that he sexually harassed a number of employees over his career. He has denied that any of his sexual relationships were non-consensual. He later sold all his holdings in the company.

The commission has scheduled hearings over the next three days.

At the start of Tuesday's session, Maddox apologised and told the commission the company is changing from one that was "about a man" to one that has values.

"Our company was shaken to its core," he said. "We were in crisis and many of us were in denial."

Maddox said he later realised there were many victims and many of them felt powerless.

"For that, I am deeply remorseful," he said.

The commissioners will later enter closed-door deliberations. Once a decision is made on the license, the commission will issue a written finding, although exactly when that happens has not been decided.

The company has taken a number of steps to distance itself from its founder, including naming a new chairman, CEO and female board members. In February, Wynn Resorts was fined US$20 million, the largest penalty ever imposed by Nevada regulators, but the company did not lose its licence to operate there.

Investigators also raised concerns about the company's initial response when the scandal broke.

The report found Steve Wynn visited the casino's spa in Las Vegas and held "town-hall-style meetings," where he asked for a show of hands by anyone who believed he sexually assaulted them.

"No one at the company appears to have tried to stop Mr Wynn from proceeding in that manner," Karen Wells, director of the commission's Investigations & Enforcement Bureau, told regulators during a 90-minute delivery of the findings.

Steve Wynn declined to be interviewed by investigators, or answer written questions.

Wells read a statement the bureau received from him.

"I deny ever having a relationship that is not consensual," Wynn told the bureau.

He said he knew his company had policies regarding relationships and harassment.

"I was not, however, familiar with the detail of those policies," he said, according to Wells.

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