Elaine Wynn Says Casino Downplayed Sex Misconduct Allegation

(Bloomberg) -- Elaine Wynn said a Wynn Resorts Ltd. in-house lawyer who was told in 2009 about an “alleged rape" of an employee by her former husband, Steve Wynn, called it a “personal” matter.

The ex-wife of the company’s founder testified Wednesday for the first time in open court about the allegations of sexual misconduct that led Steve Wynn to step down as chairman and chief executive officer of his casino empire last month.

She said at a hearing in Las Vegas that she told Wynn’s general counsel, Kim Sinatra, nine years ago about the alleged rape from four years earlier.

Sinatra responded that "it was not a company matter but a personal matter, and as far as she was concerned, it was handled," according to Elaine Wynn’s testimony.

In a statement issued after the hearing, Sinatra said that Elaine Wynn never told her there was an allegation of rape against Steve Wynn.

"In the relevant conversation in which she promised to destroy Steve Wynn and said she didn’t care if that reduced the company’s stock price to zero in the process, Elaine Wynn made an oblique reference to a settlement, and nothing more,” Sinatra said.

A Nevada state judge is deciding what evidence of Steve Wynn’s alleged misconduct can be brought at a jury trial scheduled for next month. Elaine Wynn claims she lost her seat on the Wynn Resorts board of directors in 2015 because she had raised questions about her ex-husband’s "reckless behavior."

Todd Bice, a lawyer for Wynn Resorts, said the company fundamentally disputed that Elaine Wynn reported the 2005 incident as a corporate governance issue.

"She was seeking and sharing information from Mrs. Sinatra to use in her divorce," Bice said at the hearing. Elaine Wynn used information about the 2005 incident to get another $4 million from her ex-husband in their divorce settlement, according to Bice.

Elaine Wynn has argued that a private, multimillion-dollar settlement her ex-husband made with the employee in 2005, without telling the board of directors, was evidence of his irresponsible management of the company.

The Wall Street Journal reported in January that the payment involved allegations that the executive had forced himself upon a company manicurist and that the incident fit a pattern of Steve Wynn pressuring employees to have sex with him.

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