Wynn Resorts Chief’s Ex-Wife Seeks Whistle-Blower ProtectionBy
Elaine Wynn cites potential securities law violations
Nevada top court told she fears ex-husband Steve’s retaliation
Elaine Wynn asked the Nevada Supreme Court to grant her whistle-blower protection for disclosures she made to Wynn Resorts Ltd.’s audit committee and outside auditor about what she said were potential securities law violations by the casino operator.
Wynn said in her petition Thursday that a Las Vegas trial judge’s refusal to give her whistle-blower protection exposes her to retaliation by Wynn Resorts and Steve Wynn. She’s battling her ex-husband, the founder and chief executive officer of the company, to undo restrictions on her ability to sell her more than $900-million stake in Wynn Resorts.
The former couple’s fight is part of a three-way brawl that started when Wynn Resorts forcibly redeemed the 20 percent stake of Steve Wynn’s former business partner Kazuo Okada. Elaine Wynn filed a separate claim in Wynn’s lawsuit against Okada to escape a shareholders agreement that was part of the couple’s divorce and that prevents her from selling her shares without her ex-husband’s permission. She claims she wasn’t re-elected last year to the company’s board because she criticized his management style.
Elaine Wynn said in her Supreme Court petition that she sent a letter in July to the audit committee and to Ernst & Young, the outside auditor, "raising questions about the conduct of Wynn Resorts and its management that she reasonably believed violated federal securities laws."
The petition didn’t specify what potential violations she believes occurred.
"Our company takes its obligations under all federal laws very seriously and is frustrated when those laws and valid protections are twisted and used to pursue a personal agenda," said Michael Weaver, a spokesman for Wynn Resorts.
The trial judge ruled that Elaine Wynn isn’t a whistle-blower entitled to the protections afforded under the Sarbanes-Oxley or Dodd-Frank laws, and she has never publicly provided any explanation as to how the company could retaliate against her, according to Weaver.
Elaine Wynn said in her petition that the company dismissed her concerns and has sought “Draconian” sanctions against her for allegedly violating a court order prohibiting disclosure of confidential information obtained through pretrial exchange of information and sworn testimony. Wynn Resorts has also sought to question her under oath about how she got the information she shared with the company’s auditors, according to the filing.
Wynn Resorts also seeks to disqualify the lawyers Elaine Wynn retained after she wasn’t nominated to the board of directors. The lawyers allegedly used privileged information when she amended her claims against her ex-husband in March, adding among other things that he made a multimillion-dollar settlement with a former employee to avoid allegations of “serious misconduct.”
The case is Elaine Wynn v. Eighth Judicial District Court, 71432, Nevada Supreme Court.