WWE And Investors Secure Approval For $39 Million Settlement
WWE and investors who say the company misled them about problems with business ties to the Kingdom of Saudi Arabia have secured final approval for a $39 million settlement.
We noted back in late November 2020 that a SEC filing by WWE revealed that the company closed on a $39 million settlement for a class action lawsuit led by the Firefighters' Pension System of the Kansas City, Missouri Trust. The suit, originally filed in March 2020, alleged that WWE executives deceived investors over their business dealings in Saudi Arabia, inflating the company stock and selling more than $280 million worth of shares at fraudulently inflated prices. The suit had been consolidated by six different law firms, and included multiple separate suits, including one filed by the City of Warren, Michigan Police & Fire Retirement System. It alleged that WWE officials failed to disclose how the expected business agreements with Saudi Arabia for Middle Eastern TV deal had not been consummated, but that by allowing investors to believe otherwise, the company had caused the stock to rise when it should not have.
In an update, WWE and the investors secured final approval for the $39 million settlement in federal court in New York last week, according to Bloomberg Law. Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York gave his final sign-off to the settlement in an order docketed last Thursday.
The cash deal represents around 18.2% of estimated classwide damages, investors told the court when they sought the preliminary approval in 2020. Judge Rakoff's approval comes after he rejected WWE's bid to dismiss the suit in late 2020. He then preliminary approved the settlement in March of this year.
There were no objections to the settlement. The settlement class consists of everyone who acquired WWE common stock from February 7, 2019 through February 5, 2020, and lost money as a result, with exceptions for those with other close ties to the company.
Labaton Sucharow LLP of New York City, lead counsel on the suit, will get $7.02 million in attorney's fees, which translates to 18% of the settlement fund. The law firm will also get more than $468,000 as reimbursement for litigation expenses.
The pension fund representing the investors as lead plaintiff, which was the Firefighters' Pension System of the Kansas City, Missouri Trust, will receive more than $6,200 as reimbursement of its reasonable costs and expenses, the judge ruled.
WWE did not admit any fault. The company was represented by two firms – Day Pitney LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP.