US judge revives class-action claim in Wynn Resorts lawsuit

LAS VEGAS (AP) — A federal judge in Nevada has revived elements of a securities fraud lawsuit seeking class-action status for allegations that executives at Wynn Resorts Ltd. knew about, but disregarded, reports of sexual harassment and misconduct against company founder Steve Wynn.

U.S. District Judge Andrew Gordon ruled the case can go forward alleging that Steve Wynn, board members and top executives at his Las Vegas-based company violated Securities and Exchange Commission laws and rules through “material misrepresentations and omissions.”

Wynn has denied allegations that became public in January 2018 with a Wall Street Journal report about dozens of casino employees describing, as the judge noted, “behavior that cumulatively would amount to a decades-long pattern of sexual misconduct.”

The former casino mogul, now 79, resigned as company chief executive and board chairman shortly after the Journal article appeared and has multiple ongoing court fights.

His attorneys in the current case, Colby Williams in Las Vegas and Michelle Johnson and Colleen Smith in California, declined to comment about Gordon's order.

A different federal judge dismissed the complaint in May 2020, but allowed plaintiffs led by John Ferris and Joann Ferris to amend and refile the case.

It seeks unspecified damages for unnamed holders of Wynn stock that plunged in value more than 17% after misconduct allegations became public.

“The court's decision underscores the fact that alleged sexual misconduct and harassment by corporate executives are material issues for investors, especially when management turns a blind eye to reports of wrongdoing,” said Murielle Steven Walsh, attorney for the plaintiffs. “This type of misconduct poses a threat to a company's financial success.”

Gordon, in his...