New York City pension funds file suit against Wal-Mart Jamie Davis at 8:54 AM ET
[JURIST] New York City on Monday filed a derivative suit [press release] in Delaware Chancery Court [official website] against Wal-Mart [corporate website] alleging that both officers and board members of the company breached their fiduciary duties to shareholders by improperly handling reports of bribery that occurred in Mexico. The allegations of bribery and the alleged cover up that followed first became an issue in April when the New York Timesreported [NYT report] that top management officials at Wal-Marts in Mexico, or Wal-Mex [corporate website, in Spanish], participated in bribery schemes totaling over $24 million in order to help the company grow quickly. New York City Comptroller John Liu [official website] said:
Wal-Mart's board has repeatedly rebuffed our office and the New York City Pension Funds when we have raised concerns over the company's failure to comply with legal and ethical standards. Rooting out the directors and executives responsible for the current crisis would be a first step, but Wal-Mart also needs corporate governance reforms and an independent board that will protect outside shareholders and safeguard against another breakdown of internal controls.
The New York City Pension Funds are seeking recovery for the corporation, not the shareholders, and change in the corporate governance.
Wal-Mart has recently been no stranger to lawsuits. Last year the US Supreme Court ruled [JURIST report] in that a group of women seeking to recover damages from Wal-Mart failed to meet the requirements for class certification. In February 2011 Wal-Mart also escaped liability after a judge for the US District Court for the Western District of Michigan ruled [JURIST report] that Wal-Mart did not wrongly fire an employee who had been using medical marijuana to treat a brain tumor.
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