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Wal-Mart Wins as Judge Dismisses Mexico Bribery Lawsuit

Wal-Mart Stores Inc. WMT had some positive news flowing in as a bribery lawsuit filed against the company by one of its shareholders was dismissed, per Reuters.

Per sources, a Delaware judge dismissed the shareholder lawsuit accusing the company’s board of trying to cover up bribes paid by its executives in Mexico. The allegations stemmed from a 2012 New York Times investigation that found that Wal-Mart's Mexican unit had paid millions of dollars in bribes to build its Wal-Mart de Mexico business, which invited federal investigations in the U.S. and Mexico, and a global anti-corruption compliance review by Wal-Mart.

The Delaware judge ruled that the suit must be dismissed because an Arkansas judge had previously dismissed a similar complaint, as the plaintiffs could not show the alleged misconduct by Wal-Mart.

Wal-Mart has always remained under media scrutiny due to its size and scale of operations. It has had to face criticism for issues such as labor disputes and breaching of food safety measures in China.

Due to these bribery allegations and lobbying charges, the company incurred huge expenses, which significantly impacted its margins. Moreover, the allegations severely hurt investor confidence.

Wal-Mart has also been accused of labor disputes, breaching food safety measures, as well as bribery charges in the past. It was even accused of violating India’s Foreign Exchange Management Act regulations in relation to the company’s plan to set up stores in the country. Such allegations significantly impact the company’s reputation and severely hurt investor confidence.

Wal-Mart currently has a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked retailers worth considering in the broader retail sector include The Kroger Co. KR, New York & Company Inc. NWY and Shoe Carnival Inc. SCVL. All these hold a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NEW YORK & CO (NWY): Free Stock Analysis Report
 
WAL-MART STORES (WMT): Free Stock Analysis Report
 
KROGER CO (KR): Free Stock Analysis Report
 
SHOE CARNIVAL (SCVL): Free Stock Analysis Report
 
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