After Tough Week, Wynn Resorts Files Brief Contending Maddox Should Not Be Disqualified

Wynn Resorts filed a legal brief with the Massachusetts Gaming Commission (MGC) Tuesday morning arguing at length that Wynn CEO Matt Maddox not be disqualified from the gaming license, and that the Commission overstepped its boundaries in tough questioning of Maddox during hearings last Thursday.

“To be clear, there is absolutely no evidence that Mr. Maddox was aware of any of the allegations of sexual misconduct at the time that they were made to other executives,” read the brief. “No one has testified – or even suggested – that Mr. Maddox was aware of those allegations—not one email or other piece of evidence exists to show that he was advised of those allegations, and he has twice testified under oath that he was not aware of them. That other executives knew and failed to advise Mr. Maddox is their failure, not his.”

The MGC indicated it would not likely be commenting on the legal brief.

The Commission said that in the wake of the three days of casino hearings last week, they are conferring and evaluating all of the information. They will not issue a written decision for at least a couple of weeks, they said.

Wynn’s strident, 49-page, brief kicked off by offering that the MGC in its questioning of Maddox and others during last week’s hearings had possibly violated their rights as a licensee.

“The Commission may be violating the Company’s and its qualifiers’ due process rights,” read the 49-page brief. “The lack of a finding and decision for which the Company and its qualifiers could seek review appears to have impermissibly shifted the burden to Wynn MA…and Mr. Maddox to demonstrate why their 2013 suitability findings should not be disturbed, without the IEB first proving by substantial evidence that the licensee has failed to maintain its suitability by clear and convincing evidence.”

The brief comes as the entire situation has developed into a major tizzy between numerous parties involved in last week’s adjudicatory hearings at the MGC in Boston. On Thursday morning, the MGC directed very pointed questions at Maddox about his initial response in January 2018 to the claims against Steve Wynn – standing by him and issuing statements in support of him. That was dovetailed by questions from Commissioners who seemed to find it hard to believe that Maddox did not know something about the allegations and conduct of Steve Wynn after working so many years with him.

By all accounts, the reaction by the Commission to Maddox on Thursday left many wondering whether or not his status as a qualifier on the gaming license could be stripped – or in gaming terminology, “disturbed.” That speculation in the general public has followed by several prominent media members in Boston calling for Maddox to step aside.

The brief on Tuesday seemed to lay out the legal case for Maddox within the firestorm that has erupted here.

The brief explained that Maddox, as well as other executives, did not have any knowledge of the incidents from numerous years because they were help very close to the vest, and were usually handled by outside attorneys.

“The answer is two-part: first, the settlements were known to very few within the Company who worked in silos, meaning that some individuals became aware of certain settlements, but not others; and second, which is related to the first, multiple sets of outside counsel were used to finalize the settlements,” read the briefing.

“Mr. Maddox cannot be held to a higher standard of suitability than all other

Qualifiers,” continued the briefing. “Questions about his business judgment and leadership, particularly those focused on whether he responded quickly enough—not that he has not responded—to the crisis facing the

Company, are not part of the suitability criteria…and, accordingly, cannot be used as grounds to disturb Mr. Maddox’s suitability determination. Ultimately, and respectfully, evaluation and judgment of Mr. Maddox’s leadership abilities is not the responsibility of the Commission, but of Wynn Resorts’ Board…”

The brief also suggests 13 measures in light of the hearings last week, measures they say will prevent such things from ever happening again in Nevada or Massachusetts.

Many of them deal with protocols for anyone encountering Steve Wynn, or any situation where Steve Wynn might find his way onto a Wynn property. The fifth stipulation involves new protocols for reporting sexual harassment or sexual assault. The remainder involve new reporting procedures for the company to state gaming regulators, as well as mandated trainings for employees.

A final stipulation involves information about how the company has terminated Head of Security James Stern.

No monetary penalties or change of personnel are suggested.

“For the reasons stated herein, the Commission should find that Wynn MA and the Company have established their ongoing suitability by clear and convincing evidence,” read the conclusion to the brief.

Chief of Security asked to leave following MGC testimony

On Monday morning, news spread that Wynn Resorts had asked its long-time head of security to resign – that coming after some rather interesting testimony late on Thursday about how the former FBI agent had surveilled and followed others in the company, including Elaine Wynn.

“Mr. Stern is no longer with the Company,” said Spokesman Michael Weaver.

That was further outlined in a legal brief filed on Tuesday.

That brief indicated that CEO Matt Maddox had informed Stern on Saturday, April 6, that his services were no longer needed.

“Any person hired to replace Mr. Stern as the head of corporate security and investigations will report to Wynn Resorts’ Chief Global Compliance Officer,” read the legal brief. “No surveillance will be conducted of employees or third parties without the permission of the Chief Global Compliance Officer and the General Counsel or other in-house counsel to whom she delegates responsibility.”

During Thursday’s testimony, Elaine Wynn revealed that she had learned that day about the company’s efforts to follow and surveil her during the contentious legal fighting that had erupted in recent years.

His testimony also revealed he had spied on other individuals during his tenure, including a person that was talking to the Wall Street Journal for its groundbreaking story last year.

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