Pomerantz Wins Class Certification in Wynn Resorts Sexual Misconduct Securities Litigation
On March 1, 2023, U.S. District Judge Andrew P. Gordon of the District of Nevada granted plaintiffs’ motion for class certification and appointed Pomerantz as Class Counsel on behalf of the Lead Plaintiffs – John V. Ferris, JoAnn Ferris, Jeffrey Larsen – and the class in Ferris, et al. v. Wynn Resorts Ltd., et al., No. 2:18-cv-00479-APG-DJA (D. Nev.). This securities fraud class action arises from Wynn Resorts Limited’s (“Wynn Resorts”) concealment of a long-running pattern of alleged sexual misconduct by CEO and founder Stephen (“Steve”) Wynn against female employees of the company.
The alleged misconduct first came to light in January 2018 with the publication of a Wall Street Journal article detailing numerous Wynn employees’ complaints of abuse at the hands of Steve Wynn. Gaming regulators later confirmed that the company’s management had repeatedly turned a blind eye to allegations regarding Wynn’s conduct and failed to investigate reports of sexual assault. Wynn resigned soon after, and the company was forced to replace the management that had covered up Wynn’s misdeeds.
In August 2021, Pomerantz defeated, in part, defendants’ motion to dismiss the plaintiffs’ Second Amended Complaint when the court upheld claims regarding two sets of misstatements, including: i) a 2016 press release by the company denying allegations by Steve Wynn’s ex-wife that Wynn had engaged in misconduct and that the company was withholding information from gaming regulators; and ii) statements issued by the company and Steve Wynn denying the Wall Street Journal’s allegations and claiming that the company had a hotline in place for reporting harassment and similar misconduct (and that no reports had been filed, thereby implying that no sexual misconduct had occurred).
In the ruling this week granting class certification, Judge Gordon found numerosity, commonality, typicality and adequacy among the effected investors and found that “There is no dispute that the defendants’ alleged misrepresentations were publicly known because they are contained in the defendants’ press releases.” He added that the plaintiffs “have presented sufficient evidence of reliance based on the fraud-on-the-market theory.”
"[C}ounsel has identified viable claims that survived dismissal,” stated Judge Gordon in appointing Pomerantz as Lead Counsel. “Counsel is experienced in handling securities class actions and is familiar with applicable law, as shown by both their prior experience and their filings in this case.”
Murielle Steven Walsh, the Pomerantz Partner who leads the litigation, stated, "We are gratified that the court granted our certification motion. Plaintiffs will now be proceeding with merits discovery into the alleged misconduct by Stephen Wynn against Wynn's female employees and the enabling actions by Wynn management that allowed it to go on for years. This case continues to demonstrate that corporate integrity and accountability are important issues to investors."
“The Courts’ important ruling cements Pomerantz’s long held position that investors are concerned not only about a company’s bottom line,” stated Managing Partner Jeremy A. Lieberman, “but also about the conduct and integrity of its executives.”