Wal-Mart, the New York Times and SEC filings
by Chris Roush
Michelle Leder of Footnoted.org has an interesting post on Tuesday noting that Wal-Mart Stores warned in its 10-Q filing two weeks ago about the New York Times article that ran Tuesday about its Mexican operations.
Leder writes, “As with most of what we find, we’ll often flag something, and wait for events to unfold. Sometimes, this happens relatively quickly and sometimes it can take six months or longer. At Wal-Mart, it took exactly two weeks. Here’s the new disclosure that caught our attention two weeks ago:
“The Company expects that there will be ongoing media and governmental interest, including additional news articles from media publications on these matters, which could impact the perception among certain audiences of the Company’s role as a corporate citizen.”
“The additional news article that Wal-Mart seemed to be referring to was this sharply researched piece in today’s New York Times, which talked about a shocking pattern of corruption. Here’s a key paragraph from the Times’ piece:
“Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.”
“Shortly after the story first posted yesterday on the Times’ site, Wal-Mart put out this statement, which included a video taped by Wal-Mart Vice President for Corporate Communications David Tovar. The statement includes numbers that we haven’t seen in Wal-Mart’s SEC disclosures on the scope of its ongoing efforts related to the Foreign Corrupt Practices Act investigation, including hiring more than 300 third-party legal and accounting experts. (In the Q, the company notes that it spent $48 million on this during the third quarter and $99 million during the first three quarters).”
Read more here.