(Adds details on Wal-Mart appeal of Arkansas decision,
By Jonathan Stempel
Feb 27 Wal-Mart Stores Inc on Monday won
the dismissal of a U.S. lawsuit accusing the world's largest
retailer of defrauding shareholders in its Wal-Mart de Mexico
unit by concealing its suspected bribery of public officials in
U.S. District Judge Katherine Polk Failla in Manhattan said
holders of Wal-Mex's American depository shares
(ADRs) cannot pursue claims that Wal-Mex's former Chairman
Ernesto Vega and Chief Executive Scot Rank knew or were reckless
in not knowing about the bribery allegations.
She also rejected shareholder claims that Wal-Mex and
Wal-Mart were liable for Vega's and Rank's activity, and that
Wal-Mex misled shareholders by saying it operated legally and
ethically during the alleged bribery scheme.
Lawyers for lead plaintiff Michael Fogel did not immediately
respond to requests for comment.
The lawsuit is one of several targeting Wal-Mart after The
New York Times in April 2012 reported that the Bentonville,
Arkansas-based retailer bribed Mexican officials for years to
speed up store openings.
Wal-Mart's market value fell about $17 billion over three
days after that report was issued. The Times' reporter later won
a Pulitzer Prize for the report.
Last September, a federal judge in Fayetteville, Arkansas
said holders of Wal-Mart's U.S.-listed shares, represented by a
different law firm, may pursue their claims in a class action,
potentially boosting their recovery.
A federal appeals court later rejected Wal-Mart's immediate
appeal of that decision, without ruling on the merits.
In the ADR case, Failla rejected as speculative a claim that
Vega, who also chaired the Wal-Mex board's audit committee, and
Rank were put on notice of the alleged bribery because a senior
Wal-Mex audit executive "reported" to them.
Failla said it was at least equally likely that Vega in
particular might not have known because his relationship with
the audit executive "was attenuated, or because an employee is
likely to hide his wrongdoing from his supervisor."
In her 45-page decision, Failla also said statements by
Wal-Mex in several annual reports that it complied with Mexican
law and tried to follow "corporate best practices" amounted to
"inactionable, immaterial puffery."
Wal-Mart spokesman Randy Hargrove in an email said "we
appreciate the court's careful consideration of the issues and
dismissing these claims," and that it "wouldn't be appropriate"
to discuss how it might affect other lawsuits.
The case is Fogel v Wal-Mart de Mexico SAB de CV et al, U.S.
District Court, Southern District of New York, No. 13-02282.
(Reporting by Jonathan Stempel in New York; editing by Grant