Shareholders accused Wal-Mart Stores Inc. in a Delaware court filing Thursday of failing to comply with a court order to produce files from an internal FCPA investigation of alleged bribery in Mexico.
The plaintiffs asked the court to impose sanctions of $1 million on Wal-Mart for ignoring an order by the Delaware Chancery Court to turn over documents and e-mails from the internal investigation. The plaintiffs also asked for $10,000 a day in penalties until Wal-Mart complies.
“These sanctions will serve to bring Wal-Mart’s deliberate two-plus year foot-dragging campaign to an end,” the Indiana Electrical Workers Pension Trust Fund IBEW said in the court filing.
The Delaware Supreme Court in July affirmed a lower court order for Wal-Mart to turn over files and documents from an internal FCPA investigation to plaintiffs in the civil shareholder suit.
Wal-Mart argued the materials were protected by attorney-client privilege.
The plaintiffs said they needed the documents to discover evidence that Wal-Mart’s board may have breached its fiduciary duty to pursue an investigation into bribery allegations.
Among the files under review were some from directors, the audit committee, and Maritza Munich, the Wal-Mart attorney and compliance officer who resigned when an early investigation into alleged bribery in Mexico was abruptly terminated.
The plaintiffs said Wal-Mart was withholding some documents from discovery to protect directors and others.
The plaintiffs in Wal-Mart Stores, Inc. v Indiana Electrical Workers are pension funds that bought Wal-Mart stock, including the California State Teachers Retirement System, the New York City Employees Retirement System, and the Indiana Electrical Workers Pension Trust Fund.
In April 2012, the New York Times reported in a Pulitzer Prize-winning story that Wal-Mart’s Mexico unit paid $24 million in bribes to speed up licensing and permitting for new stores. The story said senior executives in the United States covered up the bribery after learning about it.
Wal-Mart said it self reported its internal investigation of the Mexico allegations in late 2011 and has cooperated since then with the DOJ and SEC.
Wal-Mart said in its fiscal 2014 Global Compliance Program Report that it has spent $439 million in legal fees and other costs to investigate alleged FCPA violations and to revamp its global compliance program.
The company said it is still dealing with inquiries and investigations about “allegations of potential FCPA violations” in Mexico, Brazil, China, and India, among other places.
Arkansas-based Wal-Mart told Bloomberg it has reviewed more than 265,000 pages of information while working to comply with the Delaware court order.
“We are revisiting the document-review process to make sure we have given the IBEW all of the documents it should receive,” Randy Hargrove, a Wal-Mart spokesman, said. “If we discover errors, they will be addressed and the appropriate documents will be provided.”
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.