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Walmart’s $160 Million Ripple

The article “Foreign Corrupt Practices Act Ripples [1]” highlights how settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement.

Among other ripples are private shareholder suits.

In the aftermath of the New York Times April 2012 article [2] (an article which did not lead to Wal-Mart’s FCPA scrutiny [3], but certainly magnified it to a whole new level) numerous shareholder suits rained down on the company.

As highlighted here [4], in September 2014 U.S. District Judge Susan Hickey (W.D. Ark.) adopted a previous magistrate judge’s recommendation denying Wal-Mart’s motion to dismiss securities fraud class action claims arising from the company’s FCPA scrutiny. Motion to dismiss rulings are pivotal in such actions and if a claim proceeds past the motion to dismiss stage, there is a very high probability of the company settling.

Recently, Walmart did just that.

As highlighted in this recent [5] Stipulation of Settlement, after a recent mediation “the parties accepted a mediator’s proposal to resolve the Litigation.”  As stated in the stipulation:

“The agreement included, among other things, the Settling Parties’ agreement to settle and release all claims that were asserted or could have been asserted in the Litigation in return for a cash payment of $160,000,000.00 to be paid by Walmart on behalf of Defendants, for the benefit of the Class, subject to the negotiation of the terms of a Stipulation of Settlement and approval by the Court.”


Throughout this Litigation, Defendants have denied, and continue to deny, any and all allegations of fault, liability, wrongdoing, or damages whatsoever.


[N]either the Settlement nor any of the terms of this Stipulation shall in any event be construed or deemed to be evidence of or constitute an admission, concession, or finding of any fault, liability, wrongdoing, or damage whatsoever or any infirmity in the defenses that Defendants have, or could have, asserted. Defendants have concluded that further conduct of the Litigation would be protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases such as this Litigation. Defendants have determined that it is desirable and beneficial to them that the Litigation be settled in the manner and upon the terms and conditions set forth in this Stipulation.”


If you are scoring at home, this is a $160 million ripple effect of Walmart’s FCPA scrutiny and does not include the legal fees the company incurred in connection with this civil litigation. For instance, the stipulation notes:

“During discovery, [Walmart] produced nearly 412,000 documents, totaling more than 2.7 million pages. [Plaintiff] deposed five witnesses, including one witness twice. The parties also exchanged and responded to multiple sets of requests for admission and interrogatories.”

And then of course Wal-Mart’s pre-enforcement action professional fees and compliance enhancements currently stand at approximately $900 million. [7]


Even though securities fraud claims got past the motion to dismiss stage in the Walmart matter, more often than not such claims in the aftermath of FCPA scrutiny are dismissed at the motion to dismiss stage.  Take for instance the recent decision in Rumbaugh v. USANA Health Sciences [8].

FCPA Institute - Houston (March 26-27, 2020)

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