Vince McMahon, the beleaguered founder and former chief executive of World Wrestling Entertainment, has resigned from the organization’s parent company TKO Group after being accused of sexual misconduct and sex trafficking by a former employee.

In an email to employees, WWE president Nick Khan on Friday (January 26) announced McMahon would be stepping down as TKO executive chair, leaving the TKO board of directors and having no role with WWE going forward.

The move comes after former WWE employee Janel Grant filed a lawsuit against McMahon alleging she was “the victim of physical and emotional abuse, sexual assault and trafficking at WWE,” and McMahon forced her into a sexual relationship, offering her a job and promotions in exchange for her compliance.

The complaint also alleges McMahon distributed sexual images and videos of Grant to a variety of people, including fellow WWE employees.

John Laurinaitis, the company's former head of talent relations and general manager, has also been named in the lawsuit.

Speaking to US news outlet CNN, Grant’s attorney Ann Callis said the lawsuit would “hold accountable two WWE executives who sexually assaulted and trafficked Plaintiff Janel Grant, as well as the organization that facilitated or turned a blind eye to the abuse and then swept it under the rug."

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McMahon has denied the allegations and released a statement saying: “I stand by my prior statement that Ms Grant’s lawsuit is replete with lies, obscene made-up instances that never occurred, and is a vindictive distortion of the truth. I intend to vigorously defend myself against these baseless accusations and look forward to clearing my name.

“However, out of respect for the WWE Universe, the extraordinary TKO business and its board members and shareholders, partners, and constituents, and all of the employees and superstars who helped make WWE into the global leader it is today, I have decided to resign from my executive chairmanship and the TKO board of directors, effective immediately.”

McMahon was named executive chairman of TKO Group in September after Endeavor, the international entertainment and sports giant, completed its deal with WWE to merge the organization with mixed-martial arts promotion UFC under the newly formed publicly listed TKO Group.

He is still WWE’s controlling shareholder, holding 16.4% of the economic interests in TKO and a 16.4% voting power in the new entity. However, in November TKO Group announced McMahon was selling up to 8.4 million shares in the company.

The shareholding, reportedly amounting to around a third of the US businessman’s stake in the group, will net him around $700 million based on the current share price of the company.

Responding to the lawsuit last week, TKO Group said it was taking the claims "very seriously," adding: "Mr McMahon does not control TKO nor does he oversee the day-to-day operations of WWE.

"While this matter pre-dates our TKO executive team's tenure at the company, we take Ms Grant's horrific allegations very seriously and are addressing this matter internally."

This lawsuit is the latest scandal surrounding McMahon since taking over WWE in 1982 from his father Vince J McMahon.

In June 2022, WWE announced McMahon had “voluntarily stepped back” from his duties after the company board opened an investigation into an alleged $3-million ‘hush money’ settlement between him and an ex-employee with whom he had a consensual affair.

US newspaper the Wall Street Journal first reported on the allegations and said McMahon agreed to pay the settlement to a departing employee, who was initially hired in 2019 as a paralegal, to prevent her from discussing “her relationship with Mr. McMahon or disparaging him.”

WWE’s board then reportedly uncovered “other, older non-disclosure agreements involving claims by former female WWE employees of misconduct by Mr. McMahon” totaling more than $12 million over the last 16 years. He then stepped back from his duties in June before retiring a month later.

However, in January 2023, McMahon elected himself back onto WWE’s board and appointed Michelle Wilson and George Barrios, former WWE co-presidents and directors, to the board.

He retook operational control to pursue the merger of WWE and Endeavor and lead its domestic media rights negotiations, which saw Netflix secure rights to Monday Night Raw.