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Walmart’s Recent Disclosures

Wal-Mart

Last week, Walmart made several disclosures that touched upon its Foreign Corrupt Practices Act scrutiny and compliance enhancements. The materials were released in advance of Walmart’s May 30th annual meeting.

This post highlights FCPA and related information in Walmart’s Annual Report, Proxy Statement, and Global Ethics and Compliance Report.

In its Annual Report Walmart stated as follows regarding its FCPA scrutiny which was voluntarily disclosed to the DOJ/SEC in November 2011:

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Walmart Six Years Later

Wal-Mart

Six years ago this week the New York Times published an article (here) titled “Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle.”

The conduct at issue in the Times article related to Wal-Mart’s largest foreign subsidiary, Wal-Mart de Mexico (“Wal-Mart Mexico), and suggested that Wal-Mart Mexico “orchestrated a campaign of bribery to win market dominance” and that the entity “paid bribes to obtain permits in virtually every corner” of Mexico.

The April 2012 NY Times article resulted in intense world-wide media scrutiny of Wal-Mart. However, it was known months before the NY Times article, that Wal-Mart was under FCPA scrutiny.  Like in many facets of modern life, the narrative that Wal-Mart’s FCPA scrutiny began with the NY Times article became more important than actual facts and uniformed commentators who frequently display little regard for actual facts carried forward the narrative.  (See here for the December 2011 FCPA Professor post highlighting Wal-Mart’s FCPA disclosure and here for the prior post titled “Wal-Mart’s FCPA Scrutiny DID NOT Begin with the April 2012 NY Times Article).

Thus, this week is a false six year anniversary of Wal-Mart’s FCPA scrutiny, but a meaningful anniversary nevertheless.

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Checking In On Wal-Mart’s Pre-Enforcement Action Professional Fees And Compliance Enhancements

Wal-Mart

In yesterday’s 4Q FY2018 earnings call presentation WalMart disclosed $7 million in Foreign Corrupt Practices Act and compliance related expenses ($4 million for ongoing investigations and inquiries and $3 million for global compliance program and organizational enhancements).

The Q4 expenses of $7 million compare to the following recent quarterly expenses: Q3 FY2018 $5 million, Q2 FY2018 $12 million, Q1 FY2018 $16 million; Q4 FY2017 $17 million; Q3  FY2017 $29 million; Q2 FY 2017 $28 million, and Q1 FY2017 $25 million).

Doing the math, Wal-Mart’s 4Q FY2018 FCPA and compliance-related costs is approximately $113,000 per working day.

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Associate Attorney General Rachel Brand Takes A Position At Walmart And Some People Seemingly Hyperventilate

take a deep breath

Last week, Walmart announced that DOJ Associate Attorney General Rachel Brand will “join the company as Executive Vice President, Global Governance and Corporate Secretary” and “be responsible for the organization’s Legal, Global Ethics and Compliance and Global Investigation, Security, Aviation and Travel departments, along with her role as corporate secretary.”

It was funny to see some on social media seemingly hyperventilate about this development.

Surely this must be connected to Wal-Mart’s long-standing FCPA scrutiny the inference seemed to be.

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Friday Roundup

Roundup

Former SEC FCPA Unit Chief Kara Brockmeyer on declinations and voluntary disclosure, Wal-Mart’s global chief ethics and compliance officer on increased standardization in global anti-corruption efforts, scrutiny updates, French first, and for the reading stack.

It’s all here in the Friday Roundup.

Former SEC FCPA Unit Chief Kara Brockmeyer On Declinations and Voluntary Disclosure

Brockmeyer is profiled in this recent Corporate Crime Report Q&A. (See here for a recent FCPA Flash podcast with Brockmeyer).

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