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US – Nevada regulator fines Wynn Resorts $20m for failure to ‘govern itself’

By - 27 February 2019

Wynn Resorts has been hit with a record fine of $20m by the Nevada Gaming Commission Nevada for its failure to properly ‘govern itself’ as its former CEO and Chairman Steve Wynn allegedly sexual harassed or assaulted several women working for the company.

Wynn Resorts will retain its operating license by paying the settlement approved by four commissioners who set the fine.
Commissioner Philip Pro, a former federal court judge, said: “It’s not about one man. It’s about a failure of a corporate culture to effectively govern itself as it should. The Nevada Gaming Commission are the guardians of the integrity of gambling. We need to make sure companies don’t do things that bring disrepute on the industry. We have a responsibility to send a message so that every licensee that has that privilege license understands that if they either engage in or encountered this or tolerate the kinds of things that are sent out in this complaint there will be zero tolerance and that the penalties will be severe.”

Commissioners did praise Wynn Resorts for the multitude of corporate changes it made with none of the executives detailed in the hearing still with the company.

Commissioner John Moran said: “Isn’t it strange that the people that are the subject of this aren’t even in the room today? The people that are in this room now … they’re left with the train wreck to try to fix it.”

Chairman Tony Alamo said the level of the fine, the previous record fine was $5.5m, ‘makes it clear to all licensees that this culture cannot be tolerated,’ but also allows Wynn Resorts, the company, to ‘heal.’

“It needs to ring across the entire country, outside of our borders,” he said. “It needs to move needles here.”
Wynn Resorts welcomed the conclusion of the hearing.

It stated: “This brings to a conclusion the Nevada gaming regulators review of who in the company was aware of allegations against the company’s founder and former CEO. We are pleased that the Nevada Gaming Commission has recognised the company’s transformation and ‘refreshed culture’ over the course of the last 12 months and acknowledged the ‘paradigm shift’ that has occurred within the company. The completion of the review by Nevada regulators is an important step forward, and we deeply appreciate the trust and confidence they have placed in the new leadership of Wynn Resorts to ‘grow and prosper.”

Over the past year, the company has taken many remedial actions, several of which were recognised by the Commission during the hearing. It executed a separation agreement with founder Steve Wynn that paid him no severance and arranged for liquidation of all his Wynn Resorts shares. It separated the roles of CEO and Chairman of the Board, consistent with current corporate best practices.

It appointed Matt Maddox as CEO of Wynn Resorts and commenced a robust Board refreshment process. The median tenure of its eight independent directors is now less than two years. In April 2018, the Board elected three new female directors, resulting in a Board that is now nearly 50 per cent female. In August 2018, the Board elected Philip Satre, Richard Byrne and Matt Maddox to its Board. Mr. Satre is Chairman.

It has ensured that any employee who was aware of allegations of sexual assault against Steve Wynn and did not investigate or report it is no longer with the company.

It has appointed Ellen Whittemore, a recognised expert in gaming regulatory matters, as General Counsel; appointed Marilyn Spiegel, an executive with significant hospitality and human resources experience, as President of Wynn Las Vegas; and appointed Rose Huddleston, a seasoned human resources executive, to the newly created corporate position of Senior Vice President of Human Resources, North America.

Under the leadership of CEO Matt Maddox, the company has taken the following steps to further transform its workplace environment. It has launched enhanced Workplace Compliance and Prevention of Sexual Harassment training for all employees, designed and delivered by a third-party expert.

It has launched a Women’s Leadership Council to promote equality within the workplace. The group’s first activity was to produce a speaker series, “Women Who Thrive,” to educate and inspire employees through powerful female role models.
It was named among this year’s Best Employers for Diversity by Forbes Magazine, which recognises the top employers in the United States for their commitment to diversity and workplace culture. Wynn Resorts was one of only 14 hotel companies to be recognised in these rankings.

Philip Satre, Chairman of the Board of Wynn Resorts, said: “In my extensive experience working in the highly-regulated gaming industry I have never seen a company take actions that was as swift and comprehensive as the executive team at Wynn Resorts. Much of that occurred before I joined the Board in August 2018, however I believe our board’s follow-up and reaction to the regulatory investigations has been just as thorough and decisive.”

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