Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Aug. 20 — Wal-Mart Stores Inc's. expenses related to Foreign Corrupt Practices Act matters continue to trend downward, according to the company's Aug. 18 second-quarter earnings call.
According to a transcript of the call, Wal-Mart reported that its FCPA and compliance-related costs were approximately $30 million in the quarter, consisting of about $23 million for ongoing inquiries and investigations, and about $7 million for its global compliance program and organizational enhancements.
The retailer's FCPA and compliance-related costs appear to be gradually decreasing—in the second quarter of last year they were $43 million, and in the last two quarters they were $36 million and $33 million respectively.
Additionally, the company is expecting its FCPA expenses for the full year to be between $130 million and $150 million. During the last fiscal year, the company reported that it incurred $173 million for such costs, considerably lower than the $282 million the company spent the prior year.
Since 2012, Wal-Mart has been subjected to government investigations regarding allegations that bribes were made in order to accelerate new store openings in Mexico.
Thomas Fox, founder of Houston law firm tomfoxlaw.com and creator of the “FCPA Compliance and Ethics Blog,” told Bloomberg BNA that it's logical that Wal-Mart's FCPA-related expenses would be decreasing given that investigations related to the alleged bribery scandal are winding down.
Fox also noted that even though the raw numbers look large and may show that Wal-Mart’s compliance program was originally deficient, companies are often rewarded by government agencies at the penalty stage by initiating remedial measures up front. However, he declined to speculate as to how much Wal-Mart’s actions will pay off down the road.
When asked whether Wal-Mart's FCPA- and compliance-related expenses seemed relatively high or low, Fox said there is no real rule for how much companies should spend to either investigate or remediate such problems. He said the “bellwether” for how much companies spend in response to FCPA investigations was Avon Products Inc., but added that Wal-Mart is a significantly large company and its situation is much different.
In addition to government investigations, Wal-Mart has been engulfed in several shareholder lawsuits related to allegations that officials violated U.S. and international laws.
In March, a federal judge dismissed a derivative lawsuit alleging that Wal-Mart executives breached their fiduciary duties by misleading investors and covering up possible FCPA violations at a subsidiary in Mexico. That case is on appeal to the U.S. Court of Appeals for the Eighth Circuit.
More recently, the Delaware Chancery Court May 7 closed a hotly contested books and records action after denying a contempt motion filed against the megastore. In doing so, Chancellor Andre G. Bouchard concluded that the retailer had fully complied with a 2014 Delaware Supreme Court order requiring the company to release internal documents related to what directors may have known about alleged bribes made at the company's Mexico subsidiary.
To contact the reporter on this story: Michael Greene in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
The transcript of the earnings call is available at http://stock.walmart.com/files/doc_financials/2016/Q2/Management-earnings-call-transcript.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)