|Did the clerk get fired?|
Errant SEC Filing Roils Wynn Stock
By ALEXANDRA BERZON and KATE O'KEEFFE
Wall Street Journal
Updated March 2, 2012, 5:11 p.m. ET
Wynn Resorts Ltd. added to its headaches Friday as trading in its shares was temporarily halted after the gambling giant erroneously said it received a hotly anticipated approval to build a new casino in Macau.
The mistaken filing with the Securities and Exchange Commission had caused Wynn shares to jump 6% in heavy Nasdaq trading Friday morning. After about 40 minutes, trading was halted for 45 minutes. The company then put out a new filing retracting the earlier one. Instead, Wynn said in the second statement, the deal hadn't been published in Macau's official gazette, which would signal the deal had been approved by the government.
Wynn said in the second filing that the earlier filing "was not authorized by the Company" and had been "filed by mistake by the Company's agent." It had no further comment.
The law firm Skadden, Arps, Slate, Meagher & Flom LLP said a clerk in its filing department had inadvertently filed an unauthorized filing.
"We apologize that this mistake occurred," the firm said in a statement. "We have taken steps to rectify the situation as quickly as possible and are reviewing what occurred to ensure that it cannot happen in the future."
Las Vegas-based Wynn is one of three casino companies that since 2010 have been expected to receive approval from the Macau government to build in the lucrative Cotai region of Macau. The others are the Macau subsidiary of Las Vegas-based MGM Resorts International Inc. and Macau gambling magnate Stanley Ho's SJM Holdings Ltd.
Wynn already owns two casinos in Macau, along with two in Las Vegas. Overall Macau gambling revenue is more than five times that of the Las Vegas Strip, which is slowly recovering from a deep downturn.
The Macau government has lately been slower than in recent years to approve new casino projects. It has also complicated development efforts by limiting the amount of foreign labor that companies can import and the number of gambling tables they can put in their casinos.
Friday's misstep was the latest in a series of confusing communications from Wynn regarding the Cotai land deal.
On Sept. 12, Wynn's Macau subsidiary told the Hong Kong Stock Exchange that it had formally accepted the terms and conditions of a land-concession contract for a 51-acre parcel in Cotai. Many interpreted the announcement as an indication that Wynn had finally received final approval from the government to build its new project.
But local Macau media soon reported that the government said it hadn't yet made its final decision and that it was still considering the application.
The land-rights application process is only officially completed once the land grant is published in Macau's official gazette. But Macau legal experts have said such a document is usually published shortly after the terms of the concession have been finalized and that the delay in Wynn's case was highly unusual. Neither the company nor government officials have offered any explanation.
Some industry executives said Wynn's mid-September disclosure represented a political faux pas, since it preceded formal approval from the Macau authorities. But some legal experts defended Wynn's move, saying it was obligated to do so under the Hong Kong exchange's disclosure rules.
Observers are already interpreting Friday's mistaken announcement as similarly problematic.
Cameron McKnight, an Wells Fargo Securities analyst, said in a note the new episode could "delay the process further."
But Mr. McKnight speculated that some investors might interpret the erroneous filing as an indication Wynn could be close to announcing approvals.
Even after trading resumed, the company's stock remained higher than before the episode began. It closed up 4.3% at $127.27.
Friday's mistaken statement appeared to have been written in January. It said the government had approved a resort with "gaming areas, retail, entertainment, food and beverage, spa and convention offerings."
It also said the company would pay $50 million to a third party for the rights to develop on the land. The company had previously disclosed plans to make those payments but still has not said who they are going to.
Wynn is also enduring scrutiny in the wake of a major dispute with Japanese businessman Kazuo Okada, who until last month was the largest shareholder in the company. The company has accused Mr. Okada of improper payments to public officials in the Philippines and forcibly bought back his shares. Mr. Okada has said Wynn's actions are without merit. He has vowed legal action and has also indicated he thinks a pledge by Wynn Resorts to donate $135 million to a university in Macau may have been "inappropriate." The company denies wrongdoing.
—A.D. Pruitt contributed to this article. Write to Alexandra Berzon at email@example.com
A version of this article appeared Mar. 3, 2012, on page B3 in some U.S. editions of The Wall Street Journal, with the headline: Errant SEC Filing Roils Wynn Stock.