The State of Oregon, on behalf of the Oregon Public Employees Retirement System, is suing Steve Wynn and the board of directors of Wynn Resorts, alleging they breached their fiduciary duty over allegations of sexual misconduct.
The lawsuit, filed in Clark County, Nevada, District Court on March 6 by State Treasurer Tobias Read and State Attorney General Ellen Rosenblum, alleges that the board failed to investigate allegations of sexual abuse and harassment by Wynn, the founder and CEO of Wynn Resorts. It says “massive breaches of fiduciary duty” caused damage to the company and the long-term value of the stock.
“This filing will help hold the Board of Directors and Mr. Wynn accountable for their profound dereliction of fiduciary duty,” said Treasurer Read in a statement. Read is a member of the Oregon Investment Council, which manages investments for the $77.1 billion Oregon Public Employees Retirement System.
“Corporate wrongdoers are legally responsible when they commit or cover up sexual harassment in the workplace,” said Attorney General Rosenblum in a statement in the same press release. “In this lawsuit, we claim that Mr. Wynn’s previously unreported bad conduct resulted in a reduction in the value of the state’s investments in his properties. We are pleased to represent the Oregon Public Employees Retirement Fund and Treasurer Read in attempting to recover these losses for Oregon.”
The pension fund was not one of Wynn’s largest shareholders; it held 8,506 shares of Wynn Resorts worth $1.3 million as of Nov. 30, show system filings. The stock fell in value by 13% after news reports that company founder Wynn pressured employees for sex. The stock price has since recovered, at least in part because of the $2.6 billion settlement of a lawsuit between Wynn and his former business associate, Kazuo Okada.
Oregon’s lawsuit follows one by the $209.1 billion New York State Common Retirement Fund, which sued Wynn and the Wynn board of directors last month. Several smaller pension funds have also filed suits.
Both the New York and Oregon lawsuits are considered derivative actions, in that they seek to recover shareholder losses. Those losses would not directly go to the Oregon or New York pension plans, but would be used towards an economic recovery for all shareholders.
Wynn resigned as CEO of Wynn Resorts on February 6 following a January report in The Wall Street Journal that disclosed dozens of allegations by woman of sexual misconduct.
Wynn had denied the allegations. A spokesperson for Wynn Resorts was not immediately available for comment on the Oregon lawsuit.
Wynn Resorts runs two of the most upscale casino resorts in Las Vegas the Wynn and Encore Hotel. The company also owns two casinos Macau, and is building a casino in the Boston area. Wynn is credited with building modern-day Las Vegas, turning a seedy resort city into a luxury destination. His Mirage Hotel set the standard for theme-oriented Las Vegas hotels, setting the standards for other hotels, including the Wynn and Encore resorts.