Robert Bannister sued Wynn’s board for breach of fiduciary duties and four other complaints.
Robert Bruce Bannister, a former Wynn Resorts shareholder, is suing Steve Wynn, current Wynn Resorts CEO Matt Maddox, and the company’s board of directors for failing to protect the company’s interests. The Las Vegas Review-Journal first reported the lawsuit, which alleges the board members breached their fiduciary duties in concealing Steve Wynn’s misconduct from shareholders.
The lawsuit states that, “Steve Wynn engaged in misconduct…and knowingly and intentionally breached his fiduciary duties by engaging in a pattern of sexual harassment and abuse and actively concealing such misconduct in violation of the company’s policies and codes as well as various laws and regulations.”
The five-count lawsuit says the defendents — which include 5 former and 4 current members of the board of directors — withheld information that amounts to deception. Bannister is calling for damages sustained by their lack of fiduciary oversight, punitive damages against Steve Wynn (in excess of $15,000), and all expenses.
The current board members named in the lawsuit are Jay Johnson, Pat Mulroy, Clark Randt, and Alvin Shoemaker. The former members of the board named in the suit are John Hagenbuch, Ray Irani, Edward Virtue, former Nevada Gov. Bob Miller, and D. Boone Wayson.
Lawsuit Includes Wynn Board Members
In the charges leveled against board members, the filing states they “knowingly, intentionally and fraudulently violated and breached their fiduciary duties of good faith, fair dealing, loyalty, due care, candor and oversight as a result of the misconduct.”
The allegations in the lawsuit ranged from breach of fiduciary duty, civil conspiracy, and abetting the breach of fiduciary duty. Robert Bannister’s suit dovetails with the longstanding allegations by Elaine Wynn, the estranged former wife of Steve Wynn, who claimed in a 2015 lawsuit that the Wynn board of directors covered up the former CEO’s misconduct for the better part of a decade.
Steve Wynn Misconduct Scandal
The charges stem from the scandal which forced Steve Wynn out as CEO of Wynn Resorts. In January 2018, the Wall Street Journal published an expose after conducting interviews with 150 current and former Wynn Resorts employees. More than a dozen salon workers alleged that Steve Wynn sexually harassed them over the years.
In the era of the #MeToo Movement, the scandal gained headlines in major US newspapers and British tabloids. Steve Wynn categorically denied the allegations, saying they were the result of lies told by Elaine Wynn in her 2015 lawsuit.
Steve Wynn’s Ouster from Board
Within weeks, Steve Wynn stepped down as CEO of Wynn Resorts and as Finance Chairman of the Republican National Committee. By early March, Wynn had divested himself of over $3 billion in Wynn shares, leaving the company he founded alongside Elaine Wynn in 2002.
The Wall Street Journal article of January 26 alleged Steve Wynn “forced sex upon a Wynn Resorts manicurist while on company property in 2005. Steve Wynn and/or the company paid a $7.5 million settlement to the alleged assault victim in 2005.”
Steve Wynn maintains his innocence and has sued several of those involved in the allegations, including a Las Vegas area law firm, the Associated Press, and an AP reporter who appears to have published false allegations. Meanwhile, Elaine Wynn (now the largest shareholder in Wynn Resorts), made public calls for a purge of Steve Wynn loyalists from the Las Vegas casino company’s board of directors.
Elaine Wynn’s 2015 Lawsuit
Elaine Wynn’s original lawsuit in 2015, which was designed to allow her to liquidate her $1.6 billion in Wynn Resorts shares, portrayed her as a whistleblower. It alleged that the board of directors knew about the $7.5 million payment in 2005, and thus covered up Steve Wynn’s wrongdoing for 13 years.
In May 2018, Elaine Wynn challenged the reelection of Wynn board member John Hagenbuch, because she viewed Hagenbuch as a Steve Wynn crony. Because John Hagenbuch was a neighbor of Steve Wynn from Wynn’s Idaho vacation property, Elaine Wynn’s arguement won the day and the man announced he would step down from the board by the end of the year.
Meanwhile, new chief executive Matt Maddox brought in four respected outside directors to change public perceptions of the Wynn board. The moves came at a time the Massachusetts Gaming Commission announced a 7-month probe into the board’s worthiness to maintain its casino license for the Encore Boston Harbor casino in Everett.
Robert Bannister’s Lawsuit
Robert Bruce Bannister’s lawsuit further attacks the notion that the Wynn board is guilty of wrongdoing. It alleges “defendants did nothing to protect the company and instead took actions to protect and insulate Steve Wynn from any consequences or repercussions rather than investigating his suitability under the company’s articles of incorporation.”
Las Vegas attorneym, Aviva Gordon (of Gordon Law), questioned Robert Bannister’s standing in filing such a such. Gordon said, “If he sold his stock, then, to some extent, he got what his remedy would be.”
Steve Wynn Lawsuit v. MGC
Meanwhile, the Massachusetts Gaming Commission (MGC) is going to have a closed-door session to discuss strategy in a lawsuit filed against it by Steve Wynn. The suit is designed to block the publication of MGC investigator Karen Wells’ report on Steve Wynn’s wrongdoing, as well as evidence from a 6-year lawsuit in Nevada by former Wynn board member Kazuo Okada. Steve Wynn’s lawsuit claims the report would subverts Steve Wynn’s attorney-client privileged communications
Aviva Gordon said of the Steve Wynn lawsuit: “I suspect the Nevada Gaming Commission also wants to protect its own privilege with counsel, which is why they would have it in an executive and closed session to have their lawyers explain the allegations that have been made and the ramifications and not to share it in a public setting.”
