Oops! SEC probes Wynn Resorts Macau dealings

Michael Milken/Drexel Lambert made Steve Wynn rich and allowed him to erect monuments to his ego that his diminishing eyesight prevents him from seeing.

An SEC investigation?

You're kidding, right?

Comments worth reading, but even more so a great book entitled "Temples of Chance How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business" by David Cay Johnston that explains how Wynn, Trump, Sands, and the Gambling Industry have helped destroy America.

Is it possible that American voters will stop screwing themselves by supporting wealthy investors such as these?

SEC probes Wynn Resorts Macau dealings
By Chris Sieroty
LAS VEGAS REVIEW-JOURNAL
Posted: Feb. 13, 2012

The U.S. Securities and Exchange Commission is investigating Wynn Resorts Ltd's business practices in Macau, the company disclosed in SEC filings Monday.

The SEC's probe relates to a dispute between Wynn Resorts and its largest shareholder, Kazuo Okada, which includes Okada's demand for release of company records related to a $135 million donation pledged by Wynn Resorts to a foundation run by the University of Macau.

Okada is a Wynn Resorts director and owns almost 20 percent of the Las Vegas-based company through his Universal Entertainment Inc. He sued the company in Clark County District Court, seeking access to company financial records.

In a regulatory filing Monday, Wynn Resorts said that after a Feb. 8 hearing on Okada's lawsuit, "the company received a letter from the Salt Lake City regional office of the (SEC) requesting that, in connection with a informal inquiry by the SEC, the company preserve information relating to the donation to the University of Macau."

The SEC also requested documents related to any other donations to educational charitable institutions, including the University of Macau Development Foundation, and documents related to "the company's casino or concession gaming license or renewal in Macau."

"The pledge was made following an extensive analysis which concluded that the gift was made in accordance with all applicable laws," Wynn Resorts said in the disclosure. "The company intends to fully comply with the SEC's request."

Wynn Resorts is the second Las Vegas-based casino operator to face an SEC probe of business operations in Macau.

On March 1, Las Vegas Sands Corp., which has long had a casino in Macau and will soon open a much larger resort there, revealed that the SEC and Justice Department are investigating possible violations of the Foreign Corrupt Practices Act. The 1977 federal law prohibits U.S. citizens from offering bribes to a foreign official to obtain or retain business advantage.

Wynn Resorts did not disclose what, if any alleged violations the SEC is investigating. The agency declined comment. Wynn operates Wynn Macau and Encore at Wynn Macau and is waiting for the Chinese government to approve a major new resort planned for the Cotai Strip area of the former Portuguese colony.

Deutsche Bank analyst Carlos Santarelli dismissed the impact of the SEC's Wynn Resort probe. "We believe this will ultimately prove to be a largely inconsequential investigation, though we do wonder whether the investigation deters potential new investors ... who currently view Wynn as a reasonable relative value at current levels," Santarelli said in a note to clients Monday.

Santarelli said the investigation can go one of two directions, with the SEC dropping the matter with a declaration of "no findings" or instituting a formal investigation, "in which case the SEC would likely subpoena documents."

Shares of Wynn Resorts dropped $2.64, 2.33 percent, to close Monday at $110.56 on heavy volume of 3.72 million shares traded on the Nasdaq Global Select Market.

Wynn Resorts founder and CEO Steve Wynn addressed the investigation in a letter Monday to all employees.

"In light of the media attention that Mr. Okada has recently generated, it is not surprising that his disagreements with the company have caught the attention of regulators," Wynn wrote. "As you know, Macau is a critical market for both Wynn companies. Unfortunately, the donation to the university is not the only disagreement the board of directors has had with Mr. Okada.''

Wynn also repeated earlier comments about Okada's development of a $2 billion resort in Manila that makes him "a significant new competitor" to Wynn's resorts in Asia. Wynn has indicated that he believes the Manila development, which Wynn Resorts rejected, is driving Okada's lawsuit.

While Wynn Resorts has argued that Okada does not have the right to inspect company records, Clark County District Judge Elizabeth Gonzalez on Feb. 8 gave the company two weeks to review Okada's list and either allow him access or deny it. She will then decide at a Feb. 23 hearing whether Okada has the right to see any documents the company denies.

In its SEC filing Monday, Wynn Resorts disclosed more details about its donation to the University of Macau, which is sanctioned by the governments of Macau and China.

"As previously disclosed in May 2011, Wynn Macau, a majority-owned subsidiary of Wynn Resorts Ltd, made a commitment to the University of Macau Development Foundation in support of the new Asia-Pacific Academy of Economics and Management. This contribution consists of a $25 million payment made in May 2011 and a commitment for additional donations of $10 million each year for the calendar years 2012 through 2022 inclusive," the regulatory filing said.

"The pledge was considered by the boards of directors of both (Wynn Resorts) and Wynn Macau and approved by 15 of the 16 directors who serve on those boards," the filing said. "The sole dissenting vote was Mr. Kazuo Okada whose stated objection was to the length of time over which the donation would occur, not its propriety."