MANHATTAN (CN) — Nearly five years after Wal-Mart’s cover-up of bribery in Mexico made headlines, a federal judge closed the book on a class action accusing the retail giant of misleading shareholders about the scheme.
The New York Times article blowing the whistle on the mega retailer wound up winning a Pulitzer Prize and sparking investigations by Congress and the Department of Justice.
Though a securities class action by shareholder Michael Fogel has kept lawyers working for the world’s largest retailer busy for roughly half a decade, the aftershocks have quieted considerably over the past year.
Citing the statute of limitations, U.S. District Judge Katherine Polk Failla dismissed the shareholder case for the third and final time Monday.
Though the Times article ran on April 21, 2012, it dissected an internal investigation that Wal-Mart conducted between 2005 and 2006.
Failla said any misrepresentations made before 2008 are untimely under the Sarbanes-Oxley Act.
The judge also found that the shareholders did not plausibly allege scienter — the knowledge of wrongdoing — on the part of Wal-Mex or its executives.
Wal-Mart spokesman Randy Hargrove greeted the decision. “We appreciate the court’s careful consideration of the issues and are pleased with the decision dismissing these claims,” Hargrove said in an email.
Shareholder Fogel’s lawsuit claimed that Wal-Mex director Ernesto Vega “knew or was reckless in not knowing bribery was taking place” because he supervised Eduardo Juarez, the vice president of the internal audit who is not a party to the litigation.
Judge Failla said this is hardly a smoking gun.
“These allegations fall well short of the high bar required for plaintiff to plead adequately conscious misbehavior or recklessness on the part of Vega,” the 45-page ruling states. “Plaintiff alleges that Juárez ‘reported’ to Vega, but this allegation is conclusory, derived solely from Vega’s job title.”
The allegations against Wal-Mex CEO Scot Rank failed for the same reason.
“Put simply, the court cannot infer scienter from Rank’s position alone,” Failla wrote.
Representatives for the shareholders did not return a request for comment.
The Wall Street Journal reported in late 2016 that the Department of Justice investigation was unlikely to end in charges for Wal-Mart executives.