A federal appeals court has ruled that Vince McMahon’s former attorney improperly withheld certain documents from a grand jury investigating how McMahon managed multimillion-dollar settlements with two former WWE employees who accused him of sexual misconduct.
The Associated Press is reporting that three judges from the 2nd U.S. Court of Appeals in New York upheld a lower court’s ruling, declaring that the documents were not protected by attorney-client privilege due to an exception for “crime or fraud.”
The court concluded that prosecutors had enough grounds to believe that McMahon and his attorney unlawfully circumvented WWE’s internal policies and fabricated records to conceal the settlements. They allegedly provided misleading information to WWE’s auditors despite McMahon using personal funds to settle the claims.
While McMahon’s lawyer submitted numerous documents to the grand jury, they withheld 208, citing attorney-client privilege. However, the court determined these documents must be released as they were part of an effort to obscure the settlements from WWE and its auditors. Although the appeals court ruling did not explicitly mention McMahon, a source familiar with the situation verified he was the unnamed “former Chief Executive Officer of a publicly traded company.”
The current status of the grand jury investigation remains uncertain, and the U.S. Attorney’s Office in Manhattan has not provided any comment. McMahon’s representatives have also not responded to the court’s decision, although he has previously denied any wrongdoing.
The lawsuit involves a $3 million settlement with one former employee and a $7.5 million settlement with another. One of those individuals, Janel Grant, filed a lawsuit alleging she was coerced into leaving WWE and signing a nondisclosure agreement. The lawsuit contends that the NDA should be deemed invalid as McMahon did not pay the full settlement amount.
In September 2023, prosecutors issued legal orders to McMahon’s lawyer and law firm for all communications concerning the settlements. The attorney who assisted McMahon with these agreements opted not to submit certain documents, triggering a legal dispute.
The appeals court ruled that these documents must be relinquished, as they were involved in efforts to prevent WWE and its auditors from being informed about the accusations.
The ruling states, “Because the settlement agreements resolving the Victims’ claims were ‘structured and negotiated … to keep them hidden from (the Company),’ the district court found that ’all communications about the claims and settlement agreements were made in furtherance of the criminal scheme to keep (the Company) and its auditors unaware of the allegations.’”
This follows the SEC charges against McMahon, which he settled by paying a $400,000 fine and reimbursing WWE $1.3 million.
