Case: New York City Employees' Retirement System v. Wal-Mart Stores, Inc., No. 7612

Court: Court of the Chancery of the State of Delaware

Attorneys: Frederic S. Fox, Hae Sung Nam, Donald R. Hall, Jeffrey P. Campisi

Kaplan Fox currently represents the New York City Pension Funds (the “NYC Funds”) in a derivative action pending in the Court of Chancery of the State of Delaware against the directors of Wal-Mart involving alleged bribery and fraud at the company’s Mexican subsidiary, Wal-Mex. As alleged in the complaint, since at least May 2005, the New York City Comptroller’s Office has led an effort on behalf of Wal-Mart shareowners and made repeated written demands on Wal-Mart’s Audit Committee for a comprehensive, independent compliance review of the Company’s legal and regulatory controls. While the NYC Funds were spearheading an effort to convince Wal-Mart’s board to delve into the Company’s regulatory and legal compliance functions – an effort that the Audit Committee and Wal-Mart board essentially ignored – Wal-Mart leaders were in possessions of credible evidence of wrong-doing at the Company’s Mexican subsidiary and failed to fully investigate the allegations of a vast bribery and corruption scheme that was exposed by The New York Times on April 21, 2012 in an article entitled “Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle.” Moreover, the article claimed that Wal-Mart’s senior management knew about the wrongdoing starting in September 2005. This failure to fully investigate and cover up wrongful conduct was the exact problem that the NYC Funds was seeking to remedy by requesting the retention of independent counsel to conduct a comprehensive review of Wal-Mart’s legal and regulatory controls.