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Much Ado About…Little?

Wal-Mart

I didn’t come up with the headline, but I did participate in an extensive Q&A about Walmart’s FCPA scrutiny with Metropolitan Corporate Counsel. The Q&A was published in its most recent issue with the headline: “Much Ado About…Little? How a ‘garden variety’ FCPA investigation of Walmart grabbed the spotlight.”

The Q&A is republished below with permission.

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

Wal-Mart

In its recent 1Q FY2018 earnings call presentation Wal-Mart disclosed $16 million in Foreign Corrupt Practices Act and compliance related expenses ($13 million for ongoing investigations and inquiries and $3 million for global compliance program and organizational enhancements). The Q1 expenses of $16 million compare to the following quarterly expenses in FY2017 (Q4 $17 million, Q3 $29 million, Q2 $ 28 million, Q1 $25 million).

Doing the math, Wal-Mart’s 1Q FY2018 FCPA and compliance-related costs is approximately $260,000 per working day.

Over the past 5 years, I have tracked Wal-Mart’s quarterly disclosed pre-enforcement action professional fees and expenses. While some pundits ridiculed me for doing so, it quickly caught on as the popular thing to do.

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Checking In On The Wal-Mart FCPA-Related Securities Fraud Action

Wal-Mart

As highlighted in this October 2014 post, a securities fraud class action against Wal-Mart and certain former executives in connection with its Foreign Corrupt Practices Act scrutiny made it past the motion to dismiss stage.

It is unusual for such claims to proceed to trial and the Wal-Mart action, if it follows the typical path, is unlikely to proceed to trial.

Yet this post highlights two pre-trial developments in the case. The first concerns the judge granting plaintiffs access to certain internal documents and thus denying Wal-Mart’s claim that such documents were covered by the attorney-client privilege or work product doctrine. The second concerns the judge granting plaintiffs the ability to depose Wal-Mart’s current CEO.

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Wal-Mart’s FCPA Scrutiny DID NOT Begin With The April 2012 NY Times Article

Wal-Mart

If you follow media reporting (and certain FCPA commentators) you probably heard the narrative before: Wal-Mart’s Foreign Corrupt Practices Act began with the April 2012 New York Times article.

However, this is false.

Set forth below is the chronology of Wal-Mart’s FCPA scrutiny – as even reported by the New York Times – and based on other information in the public domain.

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Bloomberg Report Suggests $300 Million Wal-Mart FCPA Enforcement Action

Wal-Mart

Against the backdrop of certain commentators using the “b” word (as in billions), I predicted from the start that Wal-Mart’s Foreign Corrupt Practices Act enforcement action was unlikely to be a top five FCPA settlement amount of all-time.

Bloomberg reports: “Wal-Mart is preparing to pay roughly $300 million to resolve a long-running U.S. investigation into allegations of bribery by its employees, according to people familiar with the matter.”

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