On April 24, World Wrestling Entertainment, Inc. (WWE) shareholders Ryan Merholz and Melvyn Klein filed a lawsuit against Vince McMahon, Stephane McMahon, Paul Michael "Triple H" Levesque and other high ranking WWE executives alleging that the executives took actions that were not in the best interest of the company's shareholders.
It appears that one of the key aspects of the lawsuit is allegations that there are major concerns regarding the financial relationship between WWE and the Kingdom of Saudi Arabia and that Vince McMahon and the others might have been taking advantage of their personal knowledge of those private concerns that led to suspicious stock sales meant to enrich McMahon and the others at the cost of the company's shareholders.
The lawsuit specified multiple grounds for the legal action, including a beach of fiduciary duties, a waste of corporate assets, violations of the Security Exchange Act of 1934, making false statements, misleading the public about WWE's business prospects, artificially inflating the stock price of WWE and, of course, permitting the sale of nearly $300 million worth of personal stock personally held by some of the company's senior executives.
The stock sell-off was clearly the most troubling accusation, as the suit acknowledged: “The Company’s most senior executives and directors took advantage of WWE’s inflated stock price to sell millions of dollars’ worth of their own WWE shares during this time period. In a single stock sale on March 27, 2019, WWE’s Chief Executive Officer (“CEO”) and Chairman of the Board, Defendant V. McMahon, sold more than 3.2 million WWE shares for over $261 million in proceeds. This sale occurred when there were only a few days left in the Company’s 2019 first quarter which insiders knew was experiencing poor financial performance and despite growing behind-the-scenes problems with the Saudis.”
WWE had previously signed a multiyear television deal with the Orbit Showcase Network, a Saudi Arabia-controlled direct broadcast satellite provider and also a partnership with the Saudi General Sports Authority to hold a series of matches in the country. However, before McMahon sold the stock, he knew that those deals were falling apart. Those issues with the Saudi Royal Family eventually led to a number of wrestlers and WWE personnel being detained in Saudi Arabia following the Crown Jewel event last November.
This is only one of a series of recent lawsuits against McMahon and the WWE for essentially the same sort of allegations. For instance, the Warren City Police & Fire Retirement System, Michigan filed a class action lawsuit against WWE in March over the alleged Saudi Arabia situation, as well.
Via HeelByNature.com