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John L. Smith On Wynn Resorts Settlement With Okada


(AP Photo/Isaac Brekken)

Casino developer Steve Wynn, right, his wife Elaine Wynn, center and Kazuo Okada, left, attend a Nevada Gaming Commission Meeting in Las Vegas, Thursday, March 24, 2005.

Japanese billionaire Kazuo Okada has had a rough time of it lately. 

He was kicked off the board of his own Tokyo-based company. 

He was kicked off the board of Wynn Resorts. He sued them. But that lawsuit didn’t seem to be moving forward… until recently.

Because as rough a time as Kazuo Okada has had, Steve Wynn has had it rougher.

Wynn Resorts reached a $2.4 billion settlement with Okada to compensate for the stock he was forced to sell.

John L. Smith has been reporting on both the Okada story and the Wynn story. Smith describes the whole thing as a "tangle" of lawsuits, but in essence, Wynn Resorts had Okada investigated.

The investigation found he had used 'influence peddling' for a project in the Philippines. 

“They found what looked like wrongdoing and forcibly redeemed his stock, which meant that they forced the sale of that stock with a very long payout over many years,” Smith explained.

However, Okada felt like he did nothing wrong and sued. 

Okada held 20 percent of Wynn Resorts stock, which brings into question the real motivation for the investigation. 

“The intrigue of it is what were all the motivating factors?” Smith said.

Smith doesn't have the answer to that but Okada felt he was being pushed out.

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Wynn Resorts felt it needed to be done to protect the gaming license.

The story was also tangled with the fight between Steve Wynn's ex-wife Elaine Wynn. Elaine had sued over control of the stock she had in the company but a judge had ruled that couldn't be resolved before the Okada situation was fixed.

Now that the first knot is untied, Smith said, the second can now be untied.

With all these tangled lawsuits, someone might believe investors would turn and run from the stock, but Smith said that is not the case.

“As it becomes less tangled, the investors are beginning to have more faith in the stock, which is a very strong stock to start with,” he said.

While resolving those lawsuits might be helping investors feel more comfortable, it is far from smooth sailing ahead for Wynn Resorts.

The company is about halfway through building a resort in Massachusettes and gaming regulators there are investigating Steve Wynn and the company in connection with the allegations of sexual misconduct. 

Nevada gaming regulators are also investigating and stockholders are suing, but Smith believes when the "odor" of some these licensing and ethical issues are resolved the company will probably be just fine.

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