A former lawyer for pro-wrestling impresario was wrong to withhold some documents from a federal grand jury as it investigated how the former WWE boss handled multimillion-dollar settlement agreements with two female employees who accused him of sexual abuse, a federal appeals court ruled Monday.
Three judges on the 2nd U.S. Court of Appeals in New York upheld a lower court ruling that said the documents were not protected by attorney-client privilege because of an exception for 鈥渃rime or fraud.鈥�
The appeals court said the lower court judge found prosecutors had reasonable grounds to believe that McMahon and his lawyer illegally 鈥渃ircumvented鈥� the WWE's internal controls and created false records when they concealed the employees' claims and settlement agreements from the company, and that they made false and misleading statements to the company's auditors 鈥� even though McMahon paid the settlements with funds that did not come from the company.
The appellate panel said that while McMahon's lawyer submitted many materials in response to a grand jury subpoena, they also submitted a log of 208 documents that were being withheld under assertions of attorney-client privilege.
Though the identities of the parties were not disclosed in the appeals court opinion, a person familiar with the matter confirmed the unnamed 鈥渇ormer Chief Executive Officer of a 鈥漰ublicly traded company" was McMahon. The person insisted on anonymity to discuss details that have not been made public.
The status of the grand jury investigation was not immediately clear. The U.S. attorney's office in Manhattan has declined to comment when asked about the investigation, which it has not publicly disclosed.
Representatives for McMahon, who has denied wrongdoing, said they had no immediate comment on the court ruling. McMahon has previously suggested that he was no longer under investigation.
In January, McMahon said in a statement that 鈥渘early three years of investigation by different governmental agencies鈥� into his actions had ended. The statement came as the federal Securities and Exchange Commission announced against McMahon over his failure to disclose the settlement agreements with the two now-former employees to WWE officials.
鈥淚n the end, there was never anything more to this than minor accounting errors with regard to some personal payments that I made several years ago while I was CEO of WWE," the statement said. 鈥淚鈥檓 thrilled that I can now put all this behind me.鈥�
The appeals court, however, said in Monday's ruling that the case 鈥渃oncerns proceedings currently before a grand jury. At present, no indictments have been issued.鈥�
The opinion disclosed some new details of the grand jury probe.
Representatives for one of the former employees who got a settlement agreement from McMahon, Janel Grant, declined to comment Monday.
McMahon from WWE鈥檚 parent company in January 2024 accusing him and another former executive of serious sexual misconduct. At the time, stepped down from his position as executive chair of the board of directors at WWE鈥檚 parent company, TKO Group Holdings. He continued to deny wrongdoing following the filing of the lawsuit.
as WWE鈥檚 CEO in 2022 amid a company that match those in the lawsuit.
Grant has said she was pressured into leaving her job with the WWE and signing a $3 million nondisclosure agreement. The lawsuit, which alleges sexual battery and trafficking, also seeks to have the agreement declared invalid, saying McMahon breached the deal by giving her $1 million and failing to pay the rest.
The $3 million settlement is mentioned in Monday's appellate court ruling, along with another $7.5 million settlement McMahon made with another former employee.
The Associated Press does not normally name people who make sexual assault allegations unless they come forward publicly, which Grant did.
Prosecutors served subpoenas on McMahon's lawyer, who is unnamed in court documents, and the attorney's firm in September 2023, seeking all communications between McMahon, his attorney and the law firm regarding the two former employees, according to the appellate court. The lawyer helped McMahon negotiate the settlements, the court said.
When the lawyer withheld some of the documents claiming attorney-client privilege, prosecutors asked the lower court to compel production of the records 鈥� leading to the appeal decided Monday.
The appellate judges wrote, 鈥淏ecause the settlement agreements resolving the Victims鈥� claims were 鈥榮tructured and negotiated ... to keep them hidden from (the Company),' the district court found that 鈥檃ll 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.'鈥�
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Associated Press writer Eric Tucker in Washington, D.C., contributed to this report.
