Ferris v. Wynn Resorts Limited
United States District Court for the District of Nevada
462 F. Supp. 3d 1101 (2020)
- Written by Abby Roughton, JD
Facts
John Ferris, JoAnn Ferris, and Jeffrey Larsen (collectively, the stockholders) (plaintiffs) brought a securities-fraud class action against Wynn Resorts Limited (Wynn Resorts) (defendant) and some of Wynn Resorts’ officers and directors (defendants). The stockholders alleged that between 2014 and 2018, Wynn Resorts made misleading statements and omissions that concealed alleged sexual misconduct by Wynn Resorts’ Chief Executive Officer, Stephen Wynn. The stockholders claimed that Wynn Resorts’ securities were traded at an inflated price during that time period and that when news of Wynn’s misconduct broke in early 2018, share prices declined, and the stockholders lost money. The stockholders’ allegations included that Wynn Resorts (1) made false or misleading statements about Wynn Resorts’ positive corporate culture for women, commitment to diversity, and employees’ job security when Wynn had allegedly mistreated female employees; (2) misleadingly represented that the company had a Code of Conduct that applied to all of Wynn Resorts’ employees when the company had not held Wynn to the code’s ethical standards; (3) made false or misleading statements in filings with the Securities and Exchange Commission (SEC) regarding Wynn Resorts’ belief that it was in compliance with all applicable laws; and (4) made false or misleading statements warning of the regulatory risks of Wynn Resorts or its key employees being found unsuitable for gaming licenses when Wynn’s misconduct would have rendered him unsuitable. Wynn Resorts and the officers and directors moved to dismiss.
Rule of Law
Issue
Holding and Reasoning (Navarro, J.)
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