Oregon Files Suit Against Wynn Resorts | Chief Investment Officer

The State of Oregon, on behalf of the Oregon Public Employees Retirement System, is suing Steve Wynn and the board of directors of Wynn Resorts, alleging they breached their fiduciary duty over allegations of sexual misconduct.

The lawsuit, filed in Clark County, Nevada, District Court on March 6 by State Treasurer Tobias Read and State Attorney General Ellen Rosenblum, alleges that the board failed to investigate allegations of sexual abuse and harassment by Wynn, the founder and CEO of Wynn Resorts. It says “massive breaches of fiduciary duty” caused damage to the company and the long-term value of the stock.

“This filing will help hold the Board of Directors and Mr. Wynn accountable for their profound dereliction of fiduciary duty,” said Treasurer Read in a statement. Read is a member of the Oregon Investment Council, which manages investments for the $77.1 billion Oregon Public Employees Retirement System.

“Corporate wrongdoers are legally responsible when they commit or cover up sexual harassment in the workplace,” said Attorney General Rosenblum in a statement in the same press release. “In this lawsuit, we claim that Mr. Wynn’s previously unreported bad conduct resulted in a reduction in the value of the state’s investments in his properties. We are pleased to represent the Oregon Public Employees Retirement Fund and Treasurer Read in attempting to recover these losses for Oregon.”

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The pension fund was not one of Wynn’s largest shareholders; it held 8,506 shares of Wynn Resorts worth $1.3 million as of Nov. 30, show system filings. The stock fell in value by 13% after news reports that company founder Wynn pressured employees for sex. The stock price has since recovered, at least in part because of the $2.6 billion settlement of a lawsuit between Wynn and his former business associate, Kazuo Okada.

Oregon’s lawsuit follows one by the $209.1 billion New York State Common Retirement Fund, which sued Wynn and the Wynn board of directors last month. Several smaller pension funds have also filed suits.

Both the New York and Oregon lawsuits are considered derivative actions, in that they seek to recover shareholder losses. Those losses would not directly go to the Oregon or New York pension plans, but would be used towards an economic recovery for all shareholders.

Wynn resigned as CEO of Wynn Resorts on February 6 following a January report in The Wall Street Journal that disclosed dozens of allegations by woman of sexual misconduct.

Wynn had denied the allegations. A spokesperson for Wynn Resorts was not immediately available for comment on the Oregon lawsuit.

Wynn Resorts runs two of the most upscale casino resorts in Las Vegas the Wynn and Encore Hotel. The company also owns two casinos Macau, and is building a casino in the Boston area. Wynn is credited with building modern-day Las Vegas, turning a seedy resort city into a luxury destination. His Mirage Hotel set the standard for theme-oriented Las Vegas hotels, setting the standards for other hotels, including the Wynn and Encore resorts.

Tags: Governance, Oregon Public Employees Retirement Fund (PERF), Sexual Harassment, Wynn Resorts

The Church of England Pensions Board has joined other major investors in Rio Tinto in filing a shareholder resolution calling on the mining company to fully disclose and review its relationships with industry bodies, such as the Minerals Council of Australia.

The Church’s pension board maintains that industry bodies like Australia’s Minerals Council “block progress on Australian and global climate and energy frameworks,” the group said in a release.

“Rio Tinto has supported the Paris Agreement,” said Adam Matthews, head of engagement for the Church of England Pensions Board. “However, that position is undermined when industry associations and lobbying groups, financially supported by Rio Tinto, take contrary lobbying positions.”

Other investors taking part in the proposed resolution include Swedish pension fund AP7 and Australia’s Local Government Super. The resolution is being coordinated by the Australian Centre for Corporate Responsibility (ACCR).

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ACCR recently filed a similar shareholder resolution with Australian mining giant BHP Billiton, asking it to reconsider its membership with the Minerals Council of Australia. Although the motion didn’t pass, BHP reportedly agreed to a review of its industry associations, which led to the company announcing plans to leave the World Coal Association. It also said it would withdraw from the Minerals Council of Australia if it didn’t change the way it lobbied for coal.

“The activities of trade associations which block essential climate policy, funded in large part by major resources companies, is of increasing concern to investors globally,” said the ACCR. “Of particular concern is a misalignment between the top-line climate commitments of companies, and the relative positions of their trade groups. These discrepancies leave shareholders unclear as to the validity of corporate statements on climate.”

LGS said its research shows that Rio Tinto provides significant funding to industry groups “whose energy and climate change policy stance seems entirely contrary to Rio’s stated formal commitment to the Paris Agreement’s target of limiting global temperature increases to well below 2°C.”

The Australian fund added that as a long-term shareholder in Rio Tinto, it wants to better understand the shareholder value it gets from the company funding third-party industry groups.

Tags: Church of England Pensions Board, Minerals Council of Australia, Pension, Rio tinto