June 21, 2019

Retailer Settles DOJ and SEC Charges for FCPA Violations

A global retailer settled DOJ and SEC charges of violating the books and records and internal accounting controls provision of the Foreign Corrupt Practices Act ("FCPA").

According to the DOJ and SEC Order, Walmart Inc. ("Walmart") did not comply with anti-corruption regulations under the FCPA for over a decade. According to the government, Walmart's subsidiaries in Brazil, China, India, and Mexico used third-party intermediaries ("TPIs") to make payments to government officials. Furthermore, Walmart purportedly failed to confirm that the TPIs' transactions were used for their stated intent or to prevent illegal payments being made to government officials. Despite corruption allegations and red flags that Walmart was made aware of, the action alleges that the firm failed to follow through on enforcing compliance or compliance training on several occasions. The Chief of FCPA Unit within the SEC Enforcement Division, Charles Cain, stated that "Walmart valued international growth and cost-cutting over compliance."

Walmart agreed to pay $137 million in fines and, in a related resolution, disgorgement of $144 million. Walmart is also required to have an independent monitor for a period of two years.

The DOJ also fined Walmart wholly owned Brazilian subsidiary, WMT Brasilia S.a.r.l. (WMT Brasilia) $724, 898 for failing to maintain accurate books, records and accounts.

The DOJ's investigation was conducted by the Criminal Division's Fraud Section and the United States Attorney's Office for the Eastern District of Virginia, the FBI's International Corruption Squad and the IRS-CI.

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