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New York state comptroller DiNapoli sues Wynn Resorts on behalf of pension fund

Stephen A. Wynn

Several current and former directors and executives of Wynn Resorts Ltd. have been sued by Thomas P. DiNapoli, the New York state comptroller, alleging breaches of fiduciary duty relating to allegations of misconduct by Stephen A. Wynn, the founder, former chairman and former CEO of the casino and hotel company.

Mr. DiNapoli filed suit as the sole trustee of the $209.1 billion New York State Common Retirement Fund, Albany. The pension fund held 183,800 shares of Wynn Resorts with an estimated value of $30.44 million as of Jan. 31, according to a Monday news release,

The pension fund filed suit Feb. 22 as a shareholder derivative action in a state district court in Las Vegas, the home of Wynn Resorts' corporate headquarters. This type of lawsuit is brought against company insiders by plaintiffs who allege their actions harmed the company. The filing was made in the Clark County (Nev.) District Court "because this action involves significant issues of Nevada corporate law," the lawsuit said.

Deanna Pettit-Irestone, a Wynn Resorts spokeswoman, said the company declined to comment in the case of DiNapoli vs. Stephen A. Wynn et al.

The New York pension fund's lawsuit criticized the defendants for their "abject failure to act even when informed of a longstanding pattern of sexual abuse and harassment" by Mr. Wynn. It referenced an "explosive" Wall Street Journal article, published Jan. 26, that "detailed Steve Wynn's alleged history of sexual predation at Wynn Resorts."

The lawsuit argued that board members "were complicit in Steve Wynn's pervasive pattern of sexual abuse and harassment, setting a tone at the top that permitted Steve Wynn to wield his power unchecked."

It alleges that board knew of allegations at least by March 28, 2016, amid litigation involving the company and Elaine Wynn, a former board member and Mr. Wynn's ex-wife.

The board created a special investigative committee on Feb. 2 this year; Mr. Wynn resigned as CEO and chairman on Feb. 6. Mr. Wynn has proclaimed his innocence.

Earlier this month, the $850 million Norfolk County Retirement System, Canton, Mass., sued Wynn Resorts Ltd., alleging that the pension fund suffered damages due to allegations of misconduct against Mr. Wynn and the breaches of fiduciary duty by officers and directors of the company.