New York State Comptroller Thomas DiNapoli on Feb. 26 filed a legal action against the officers and directors of Wynn Resorts Ltd. for allegedly failing to stop former CEO and Chairman Stephen Wynn from repeatedly abusing and harassing employees despite being aware of the situation.
The petition alleges that the board knew about the allegations against Wynn, as these surfaced in a March 2016 lawsuit involving the company and Steve Wynn's ex-wife Elaine Wynn, but they did not investigate the claims.
"The board's failure to act on this and other reports of Mr. Wynn's pattern of sexual abuse and harassment of his employees was a breach of their fiduciary duties to the company," DiNapoli said in a statement.
The suit follows Wynn's resignation earlier this month, which the board "reluctantly" announced and accepted. The company has since hired Gibson Dunn & Crutcher LLP to investigate the sexual misconduct allegations, but DiNapoli said in the lawsuit that the probe is unlikely to ensure independence of the board investigation because the law firm has "deep ties" to the company.
DiNapoli filed the suit as trustee of the New York State Common Retirement Fund, which holds shares in Wynn Resorts with an estimated value of about $30.4 million. The fund will vote its shares against all incumbents and insiders nominated to Wynn Resorts' board at the company's annual meeting, according to the statement.
A Wynn Resorts spokesman told S&P Global Market Intelligence that it has no comment on the complaint.