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Judge Denies Access to Wal-Mart SEC Records

NASHVILE (CN) - A law firm is not entitled to SEC records about accusations that Wal-Mart bribed Mexican officials and tried to cover up the scheme, a federal judge ruled.

The New York Times reported in April 2012 that Wal-Mart "had given millions of dollars in bribes to Mexican officials to facilitate Wal-Mart's growth in Mexico," according to court records.

In response to the story, Wal-Mart said that it voluntarily met with the U.S. Justice Department and the Securities and Exchange Commission (SEC) "to self-disclose the ongoing investigation" in the matter.

The retail giant formally acknowledged on June 1, 2012, that it was the subject of federal government investigations for potential violations of the Foreign Corrupt Practices Act (FCPA), and said that it was cooperating.

The New York Times published another article about the alleged bribery in December 2012, and a Congressional committee released several related documents in January 2013, court records show.

In April 2013, the California-based law firm of Robbins, Geller, Rudman & Dowd LLP, which also has an office in Nashville, Tenn., filed a Freedom of Information Act (FOIA) request for SEC records about Wal-Mart's potential FCPA violations.

The SEC denied the law firm's request, saying the documents were shielded by FOIA Exemption 7(a), which prevents the disclosure of certain law enforcement records.

U.S. District Judge Todd Campbell ruled in the SEC's favor on March 12, finding that the requested records are indeed law enforcement documents and that their disclosure could cause harm.

The judge said that "the SEC has appropriately walked the Exemption 7(a) tightrope in this case."

"The court is able to trace a rational link between the nature of the documents produced by Wal-Mart in response to the SEC's investigation and the interference the SEC alleges could reasonably be expected if it is required to disclose those documents," Campbell wrote. "The court agrees that, if the SEC were required to release to the plaintiff the documents it has obtained from Wal-Mart through its investigation, those documents likely would reveal the nature, scope, direction, and strategy of the agency's investigation. Simply put, the responsive documents reveal what the SEC finds to be important and relevant to its investigation."

Campbell didn't buy the law firm's argument that the SEC should release the requested records because some of them have already been made public by news reports and lawmakers.

"The choice of the New York Times and Congress to reveal some of those documents in no way obligates the SEC to compromise its investigation by releasing documents that, until that point, entities and individuals subject to its investigation could only speculate were in the SEC's investigatory file," the judge wrote. "The motivations and interests of a private company subject to an investigation by a government agency, journalists, and Congress, are far different than those of the government agency tasked with investigating and bringing legal actions against those who have violated the law."

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