Derivative action for the benefit of nominal defendant Wal-Mart
Stores, Inc. against certain current and/or former members of
Wal-Mart's board of directors and certain Wal-Mart's executives for
breaches of their fiduciary duties owed to Wal-Mart and its
Defendants breached their fiduciary duties by causing
and/or allowing Wal-Mart and its employees to engage in the
systematic practice of bribing foreign officials in Mexico to
obtain construction permits in violation of the Foreign Corrupt
Practices Act ("FCPA"), and by curtailing and covering up an
investigation into the bribery practices.
Wal-Mart, which had mainly operated retail stores in the United
States, began operations in Mexico in 1991, with the opening of a
Sam's Club. During the two decades since, Walmart de México
("WalMex") has experienced tremendous growth. As of February 29,
2012, Wal-Mart owned 2,099 stores in Mexico and employed
approximately 200,000 people in the country. One in five Wal-Mart
stores today is in Mexico, making WalMex a significant success
Wal-Mart's rapid expansion in Mexico, however, was the
product of illegal actions. For years,Wal-Mart engaged in a
wide-ranging practice of bribing officials in Mexico in order to
secure zoning approvals, reductions in environmental impact fees
and the allegiance of neighborhood leaders, in order to build so
fast that competitors could not keep up.
An earlier investigation unearthed evidence of widespread
bribery with a paper trail of more than $24 million in suspect
payments, about which WalMex's top executives had extensive
knowledge. When it was recommended that Wal-Mart expand the
investigation, the Defendants instead halted the investigation and
held no one accountable.
Shockingly, WalMex's chief executive at the peak of the
bribery scheme was promoted to President and CEO of Wal-Mart Stores
USA and is now vice chairman of Wal-Mart.
Defendants' conduct represents a breach of Defendants'
fiduciary duties that caused significant harm to the Company and
for which they must be held accountable.