WWE has been hit with another lawsuit as shareholders Ryan Merholz and Melvyn Klein filed a lawsuit against WWE, Vince McMahon, Stephanie McMahon, Paul Levesque, Frank Riddick III, Stuart Goldfarb, Laureen Ong, Robyn Peterson, Man Jit Singh, Jeffery Speed, Alan Wexler, and George Barrios.
The lawsuit, filed on April 24, alleges that top executives acted without the best interest of shareholders in mind.
Merholz & Klein state in the filing that WWE wasted corporate assets, made false statements, failed to disclose adverse facts, misled the investing public, permitted senior executives of WWE to sell more than $282 million worth of their personally held shares of Company stock at inflated prices, and more. You can view the 44-page filing (via Heel By Nature) by clicking here.
The lawsuit also touches on WWE's issues with Saudi Arabia, alleging that WWE executives sold stock before the issues and delayed deals became public.
“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 held the Crown Jewel live event in Riyadh, Saudi Arabia. After the event ended, shocking news reports surfaced claiming that the Saudi government was effectively holding a number of WWE wrestlers “hostage” in retaliation for McMahon’s decision to delay a live broadcast of Crown Jewel until the Saudis made tens of millions of dollars in past due payments. Estimates for the amount outstanding ranged from $60 million to as much as $500 million. Several wrestlers detailed their experience during the ordeal on social media platforms”
This marks the latest lawsuit filed against WWE in recent months as they've been hit with similar complaints by other shareholders. Glancy Prongay & Murray LLP put out a statement on April 6 reminding investors who purchased securities between February 7, 2019 and February 5, 2020 of a May 5 deadline to file a lead plaintiff motion in the class action suit. You can find more information by clicking here.
It should be noted that lawsuits of this nature are fairly common.