Vince McMahon, former WWE executive, under federal investigation: ABC News sources

Former WWE executive and personality Vince McMahon is under a federal investigation as he grapples with sex trafficking allegations by an ex-employee, sources familiar with the matter told ABC News.

This is a developing story. The video is from a previous report.

McMahon, who co-founded the modern WWE in 1982, resigned last month from his roles as TKO Executive Chairman and from his position on the TKO Board of Directors.

McMahon, 78, left the publicly traded company -- which is also the parent group of the UFC -- following a lawsuit filed in January that accuses him of sexual misconduct.

MORE | Vince McMahon accused of sex abuse by former WWE employee in new lawsuit

In the lawsuit, Janel Grant, who worked in WWE's legal and talent departments, alleged that McMahon forced her into a sexual relationship in order for her to obtain and keep her job and passed around pornographic pictures and videos of her to other men, including other employees. The lawsuit, which was filed in U.S. District Court in Connecticut, where WWE is headquartered, also names WWE and John Laurinaitis, the company's former head of talent relations and general manager, as defendants.

"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," McMahon said in the statement. "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 stepped down as WWE's CEO in 2022 amid an investigation into allegations that match those in the lawsuit.

"I wanted to inform you that Vince McMahon has tendered his resignation from his positions as TKO Executive Chairman and on the TKO Board of Directors," WWE president Nick Khan told all staff in a memo obtained by ESPN on Friday night. "He will no longer have a role with TKO Group holdings or WWE."

ESPN contributed to this report.