World Wrestling Entertainment, Inc. (WWE) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between February 9, 2019 and February 5, 2020, in recent years, World Wrestling Entertainment, Inc. (WWE) had entered into strategic relationships with the Kingdom of Saudi Arabia, including a multiyear television distribution rights agreement with Saudi-controlled Orbit Showcase Network (“OSN”) and a partnership with the Saudi General Sports Authority to host live events in Saudi Arabia. Despite criticism from fans for engaging in a relationship with a country rife with human rights abuses, WWE proceeded, assuring shareholders the relationships would pay off. However, WWE failed to disclose that ideological differences between the Company and the Saudi government led to the Saudi government’s refusal to pay millions of dollars it owed to WWE and OSN’s early termination of its agreement. As a result, on February 6, 2020, WWE once again disclosed its disappointing financial performance due to its inability to secure a favorable broadcasting deal with the Saudi government, revealing that the Saudi media rights deal was no longer part of WWE’s financial forecast. Following all of its disclosures, WWE’s stock traded as low as $32.38 on March 12, 2020, representing a staggering 67% decline from its class period high of more than $100.