Wal-Mart Class Action Dismissed
On March 31, a federal district court in Arkansas dismissed with prejudice a consolidated shareholder derivative suit accusing Wal-Mart Stores Inc.'s (Wal-Mart) board of directors of concealing Mexican bribery claims from investors. The Court found that that the plaintiffs did not establish that a pre-suit demand on the directors to take action would have been futile, and failed to show that the directors knew about or consciously ignored the alleged FCPA violations at the Mexican subsidiary. The Court wrote: "Nothing in the complaint suggests any particularized basis to infer that a majority of the board had actual or constructive knowledge of the alleged misconduct, let alone that they acted improperly with scienter." For the same reasons, the Court dismissed claims that the directors allowed the filing of knowingly false proxy statements. Plaintiffs filed the lawsuit after a 2012 article by the New York Times reported that top officials at Wal-Mart's Mexican subsidiary oversaw millions of dollars in bribes in connection with the company's expansion in Mexico.