Second Circuit affirms dismissal of shareholder suit against Wal-Mart premised on FCPA investigations

The Second Circuit affirmed the dismissal of a shareholder class action complaint filed against Wal-Mart Stores, Inc. (Wal-Mart), its Mexican subsidiary, Wal-Mart de Mexico (Wal-Mex), and several former executives on behalf of purchasers of Wal-Mex’s ADRs in 2011 and 2012.  According to the summary order, Congress opened an investigation into Wal-Mex in 2012 following a New York Times article that claimed the company paid more than $24 million in bribes to Mexican government officials.  The plaintiff premised his claims on Wal-Mex’s public statements in 2011 and 2012 that referenced its integrity and ethics, which the plaintiff contended were false given the bribery probe.  In affirming the dismissal, the court concluded that the company’s 2011 and 2012 statements were not actionable puffery and were not demonstrably false given that the alleged misconduct took place several years before the statements were made.  The court also concluded that the plaintiff failed to specify how the statements were false, noting that “[i]t is axiomatic that companies ‘do not have a duty to disclose uncharged, unadjudicated wrongdoing.’” 

Summary Order