In re WALMART INC.

 
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UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 86159 / June 20, 2019 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 4054 / June 20, 2019 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-19207 
 
 
In the Matter of 
 
WALMART INC.,  
 
Respondent. 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
  
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Walmart Inc. (“Walmart,” “the Company,” or 
“Respondent”). 
II. 
 In anticipation of the institution of these proceedings, Walmart has submitted an Offer of 
Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of 
these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, Respondent admits the Commission’s jurisdiction over 
Respondent and the subject matter of these proceedings, and consents to the entry of this Order 
Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act 
of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
III. 
 On the basis of this Order and Respondent’s Offer, the Commission finds
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 that: 
                                                 
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  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 
other person or entity in this or any other proceeding. 

 
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Summary 
1. This matter concerns violations of the books and records and internal accounting 
controls provisions of the Foreign Corrupt Practices Act (“FCPA”) by Walmart, a global retailer. 
From in or around July 2000 through in or around April 2011, Walmart’s subsidiaries in Brazil, 
China, India, and Mexico operated without a system of sufficient anti-corruption related internal 
accounting controls. As a result, during this time period, those Walmart subsidiaries paid certain 
third-party intermediaries (“TPIs”) without reasonable assurances that certain transactions were 
consistent with their stated purpose or consistent with the prohibition against making improper 
payments to government officials. Additionally, during this time period, when Walmart learned of 
certain anti-corruption risks, the Company did not either sufficiently investigate the allegations or 
sufficiently mitigate the known risks. 
Respondent 
2. Walmart is a Delaware corporation with its principal place of business located in 
Bentonville, Arkansas. Walmart had a class of securities registered under Section 12(b) of the 
Exchange Act during the relevant time period. The Company’s shares trade on the New York 
Stock Exchange under the ticker symbol “WMT.” 
Other Relevant Entities and Individuals 
3. Mexico Subsidiary is a Walmart subsidiary that operates retail stores in Mexico. 
Walmart has a majority equity stake in Mexico Subsidiary with the remaining shares traded on the 
Mexican Stock Exchange. 
4. China Subsidiary is Walmart’s wholly owned subsidiary that operates Walmart’s 
stores in China. 
5. Brazil Subsidiary was Walmart’s wholly owned subsidiary that operated 
Walmart’s stores in Brazil. 
6. India Joint Venture was a joint venture with India Partner that was majority 
owned and controlled by Walmart and operated wholesale stores and distribution centers in India. 
7. India Retail Business was a franchisee of Walmart that operated retail stores in 
India. 
8. India Subsidiary was Walmart’s wholly owned subsidiary that was the franchisor 
of India Retail Business. 
9. India Partner was India Subsidiary’s Joint Venture partner and the owner of India 
Retail Business. 
10. Walmart Executive was a Walmart International senior real estate employee. 
11. Walmart Lawyer was a Walmart International senior attorney. 

 
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12. Walmart Compliance Employee was a Walmart International compliance 
employee. 
13. Walmart Investigator was a Walmart special investigator. 
14. Mexico Subsidiary Executive A was a Mexico Subsidiary senior officer. 
15. Mexico Subsidiary Executive B was a Mexico Subsidiary senior real estate 
executive. 
 
16. Mexico Subsidiary Lawyer A was a Mexico Subsidiary real estate attorney. 
17. Mexico Subsidiary Lawyer B was a Mexico Subsidiary senior attorney. 
18. Mexico Subsidiary Internal Auditor was a Mexico Subsidiary senior audit 
employee. 
19. Outside Lawyer was an attorney retained by Walmart to investigate certain anti-
corruption allegations in Mexico. 
20. Brazil Construction Firm was a construction firm retained by Brazil Subsidiary to 
build and renovate certain stores in Brazil. 
FACTS 
Background 
21. At the end of Walmart’s fiscal year 1990, the Company had 1,528 stores which had 
generated annual sales of $26 billion—all within the United States. Walmart, recognizing that 
international expansion could help it become the world’s largest retailer, entered its first foreign 
market, Mexico, in 1991. In 1993, Walmart established Walmart International as an operating 
segment, headquartered in Bentonville, Arkansas, responsible for overseeing the Company’s 
operations outside the United States. Between 1994 and 1996, the Company established additional 
outposts in other countries, including Brazil and China. During fiscal year 2010, the year in which 
Walmart opened its first Indian wholesale outlet, the Company operated stores in 14 foreign 
countries, with international sales of approximately $100 billion. 
 
22. Walmart’s formula for success centered on Everyday Low Prices and Everyday 
Low Cost. Walmart’s rapid international growth, combined with its low-cost philosophy, 
contributed to the Company’s insufficient anti-corruption related internal accounting controls in 
Walmart’s subsidiaries in Mexico, India, China, and Brazil from in or around July 2000 until in or 
around April 2011. 
Early Corruption Warnings 
23. In or around 2002 and 2003, Walmart received a request for FCPA training from 
China Subsidiary and also a request for a detailed FCPA policy covering TPIs and joint venture 
partners for China Subsidiary. Walmart did not immediately provide widespread anti-corruption 

 
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training to China Subsidiary or implement TPI and joint venture anti-corruption policies at China 
Subsidiary. 
24. In or around June 2003, China Subsidiary identified a potentially troubling 
historical payment made by a certain China Subsidiary joint venture. In 1999 or 2000, the joint 
venture had entered into an agreement to pay RMB 500,000 (approximately $60,000) to the 
landlord of a China Subsidiary store for government relationship consulting services and various 
permits. The permit costs should have likely been nominal but China Subsidiary did not further 
inquire into the matter at the time. 
25. In or around October 2003, China Subsidiary’s internal audit team analyzed gifts 
with an average dollar value of less than $20 given to Chinese government officials by China 
Subsidiary corporate affairs employees and small amounts of cash provided to other Chinese 
officials for travel and meal expenses related to business meetings by the Chinese partner of a 
China Subsidiary joint venture. China Subsidiary’s internal audit team observed that these 
transactions appeared to be inconsistent with corporate policy. China Subsidiary’s internal audit 
team also observed that certain China Subsidiary anti-corruption related internal accounting 
controls had weaknesses. In response, Walmart did not promptly implement all of China 
Subsidiary internal audit’s suggested remedial actions. 
Walmart’s First Anti-Corruption Compliance Program 
26. In or around 2001, Walmart’s anti-corruption policy consisted of a paragraph in the 
Company’s Statement of Ethics. The paragraph summarized the FCPA’s prohibitions and 
described the statute’s facilitating payment exception and the procedure for making such payments. 
In or around July 2002, Walmart planned to implement a worldwide comprehensive anti-
corruption compliance and training program within a few months. In or around 2003, Walmart 
prepared draft anti-corruption compliance materials. However, nearly a year passed before the 
Company took additional steps to revise the proposed anti-corruption compliance program. 
27. Walmart published its International Anti-Corruption Policy and Procedures on or 
around March 21, 2005, and distributed them to the Company’s foreign markets. In or around 
November 2005, the implementation of Walmart’s anti-corruption compliance program was 
formally put on hold until further notice. 
Mexico 
28. On or around September 21, 2005, Mexico Subsidiary Lawyer A, who had been 
separated from Mexico Subsidiary over a year earlier, wrote an email to Walmart Lawyer. In the 
email, Mexico Subsidiary Lawyer A stated that he was responsible for many real estate projects in 
Mexico from 1975 through 2004 and wrote, “[I]f you’re interested to know confidential details 
about the way we achieved 300 projects...contact me and in that case, I would ask you do it before 
you contact [Mexico Subsidiary] because the kind of issues (for instance, we used to undercover 
expenses identified with a code known and authorized by the highest levels).”  
29. Walmart retained Outside Lawyer to advise the Company in response to Mexico 
Subsidiary Lawyer A’s allegations. During the first half of October 2005, Outside Lawyer 
interviewed Mexico Subsidiary Lawyer A twice. Mexico Subsidiary Lawyer A alleged that during 

 
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his last six to seven years at Mexico Subsidiary, Mexico Subsidiary had very aggressive growth 
goals that required new stores to open in record time. He further alleged that Mexico Subsidiary 
frequently employed TPIs, known as gestores, who in some cases made improper payments to 
Mexican government officials to obtain licenses, permits, and other approvals for certain store 
projects in Mexico. He also detailed several projects where he claimed Mexico Subsidiary made 
improper payments to obtain licenses, permits, and other approvals.  
30. Mexico Subsidiary Lawyer A alleged the scheme worked in the following manner: 
a. Mexico Subsidiary would determine which government officials 
needed to receive an improper payment to obtain a permit or license. 
Mexico Subsidiary Lawyer A would then tell one of the gestores 
which official to make an improper payment to and then obtained 
checks from Mexico Subsidiary payable to the gestores.  
b. The gestores cashed the checks and delivered the agreed-upon 
improper payments.  
c. Occasionally, the officials preferred to deal only with Mexico 
Subsidiary Lawyer A. In those instances, according to Mexico 
Subsidiary Lawyer A, the gestores provided cash to Mexico 
Subsidiary Lawyer A who made the improper payments himself.  
d. Mexico Subsidiary Lawyer A and Mexico Subsidiary Executive B 
developed a system of three-digit codes, or claves, which were typed 
or handwritten on the gestores’ invoices and tracked the improper 
benefits obtained by Mexico Subsidiary.  
e. The clave descriptions included: “avoidance or omission of 
requirement;” “influence, control, or knowledge of privileged 
information in the head of the governmental office;” and “payments 
to eliminate fines.” 
f. Mexico Subsidiary Lawyer A claimed that Mexico Subsidiary 
Executive A, Mexico Subsidiary Internal Auditor, and Mexico 
Subsidiary Lawyer B—who had been named Mexico Subsidiary’s 
compliance officer after Mexico Subsidiary Lawyer A left Mexico 
Subsidiary—also participated in the scheme. 
31. Mexico Subsidiary’s use of real estate gestores stopped after Mexico Subsidiary 
Lawyer A was separated from the Company in or around August 2004 and before Walmart’s 2005 
investigation into the gestores allegations. 
32. Walmart retained a law firm to initially advise the Company regarding Mexico 
Subsidiary Lawyer A’s allegations and decided to use internal audit and corporate investigations 
employees to conduct an investigation in Mexico. In mid-November 2005, these “preliminary 
inquiry” teams spent two weeks in Mexico investigating the allegations. While there, they 
identified a draft March 2004 Mexico Subsidiary internal audit review of gestoria payments that 

 
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had not previously been shared with Walmart internal audit executives and employees in the 
United States. The final report that was sent to Walmart in December 2004 omitted references, 
contained in earlier versions, to MXN $45.6 million (approximately USD $4 million) paid to one 
of the gestores that Mexico Subsidiary Lawyer A alleged was corrupt. While the draft report stated 
that the transactions reviewed were reasonably appropriate, complied with documentation and 
classification standards, and were compliant with local policies, legislation and generally accepted 
accounting principles, it also described “unusual” and “facilitating” payments made in connection 
with Mexico Subsidiary’s use of gestores. The final report provided to Walmart in December 2004 
had also omitted these references to suspicious transactions. 
33. In or around November 2005, a Mexico Subsidiary employee explained to 
investigators that when problems arose when obtaining licenses, Mexico Subsidiary typically 
negotiated a payment with the relevant official to resolve the problem. The same employee, 
although unsure whether improper payments were made to government officials, said that Mexico 
Subsidiary utilized gestores to “smooth out the road” so that “there would not be any bumps during 
the request for a license.” The employee also conceded that it was unusual that Mexico Subsidiary 
paid the gestores when most of the payments were supported by only one invoice and that no 
records showed what work they did, with whom they met, or how many hours they worked. 
34. In or around December 2005, Walmart Investigator circulated a report concerning 
the Mexico Subsidiary allegations that stated that laws had been potentially violated, and 
recommended several additional investigative steps. 
35. Walmart internal audit produced its own report one week later, which indicated that 
the work performed constituted only a preliminary review of the gestoria payments and that the 
auditors were unable to determine how the gestores used the funds received from Mexico 
Subsidiary. The report also made several recommendations for investigative next steps. 
36. Walmart did not follow the investigators’ proposed action plans. On or around 
February 7, 2006, Walmart tasked Mexico Subsidiary Lawyer B with leading the remainder of the 
investigation.   
37. In March 2006, Mexico Subsidiary Lawyer B prepared his investigative report, 
which concluded that the corruption allegations were unsubstantiated. However, it did 
acknowledge that certain of Mexico Subsidiary’s anti-corruption related internal accounting 
controls were deficient and, although some improvements had been made, certain additional anti-
corruption related internal accounting controls were recommended. Walmart did not address those 
recommendations by implementing sufficient anti-corruption related internal accounting controls 
until in or around April 2011. 
38. Another corruption risk identified was Mexico Subsidiary’s practice of donations in 
the form of checks, cash, and merchandise to Mexican municipalities and local government 
entities. In some instances, the donations were made around the time Mexico Subsidiary obtained 
permits and licenses or other government approvals. Some of the goods donated, such as cars and 
computers, were capable of being converted to personal use. Mexico Subsidiary did not implement 
sufficient internal accounting controls regarding the use of donations until in or around April 2011. 

 
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China 
39. Between in or around 2006 to in or around early 2011, China Subsidiary’s internal 
audit team identified certain weaknesses in anti-corruption related internal accounting controls. In 
January 2006, it observed: China Subsidiary’s draft anti-corruption policy and procedures were 
inconsistent with the policy adopted by Walmart in or around March 2005; China Subsidiary’s 
policy excluded employees of state-owned and state-controlled enterprises from the definition of 
“government official;” and formal anti-corruption training at China Subsidiary had not yet been 
provided and most Chinese managers were unfamiliar with the FCPA and misunderstood the 
concept of facilitating payments. Other anti-corruption related internal accounting controls 
weaknesses at China Subsidiary observed by China Subsidiary internal audit included lack of TPI 
retention procedures and lack of a charitable donation policy. Although internal audit raised 
recurring issues during this time period, China Subsidiary’s anti-corruption related internal 
accounting controls were not improved until in or around April 2011. 
India 
40. In or around late 2006, Walmart conducted a review of India Partner. The initial 
due diligence, while generally positive, raised certain anti-corruption red flags about doing 
business in India. One report stated that Walmart would “be targeted by corrupt individuals and 
organizations seeking bribes or kickbacks in exchange for favorable business relationships or the 
easing of bureaucratic restrictions.” The report also said that corruption would likely cause 
Walmart “delays in the processing of permits, licenses and other paperwork.” The report suggested 
that Walmart could mitigate its corruption risk with “[s]trict adherence” to the FCPA and by 
establishing “strong internal controls and management oversight.” 
41. In or around November 2006, prior to the formation of India Joint Venture, a 
Walmart real estate employee wrote to Walmart Executive that he had received a “wink and nod” 
when he “brought up transparency and clean transactions relative to the FCPA” with an employee 
of India Partner. The India Partner employee also admitted that “speed payments” were used in the 
past by India Partner. Walmart did not sufficiently address the Walmart real estate employee’s 
warning prior to forming India Joint Venture. 
42. Because of certain anti-corruption related red flags, Walmart obtained additional 
due diligence reports and reviewed their results.   
43. Walmart entered the Indian market in partnership with India Partner. Due to foreign 
direct investment restrictions, Walmart proposed that retail operations initially be franchised to 
India Partner with a wholesale business structured as a joint venture majority owned by Walmart. 
In or around August 2007, Walmart and India Partner executed franchise and joint venture 
agreements. Walmart tasked its partner with obtaining all licenses, permits, certifications, and 
zoning for retail stores in India. 
44. Between in or around March 2009 and in or around January 2011, Walmart’s 
internal audit team in India conducted at least three reviews of India Subsidiary and India Joint 
Venture. All of those reviews identified certain weaknesses in anti-corruption related internal 
accounting controls that required remediation, which were not immediately addressed. During this 

 
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time period, Walmart continued to rely on India Partner for permitting, licensing, and real estate 
matters for retail stores in India. 
45. In or around July 23, 2011, an anonymous source sent an email to certain Walmart 
executives alleging several issues. According to the anonymous email, an employee of India Joint 
Venture and an employee of India Retail Business were involved in a scheme to make improper 
payments to government officials to obtain store operating permits and licenses, and that a senior 
legal employee of India Joint Venture knew about the scheme. Although one executive requested 
that Walmart investigators examine the allegations, Walmart did not conduct an inquiry at that 
time. 
46. Despite the audit reports discussing control deficiencies and the anonymous email 
alleging improper payments to government officials, Walmart did not begin to implement and 
maintain a system of sufficient internal accounting controls related to anti-corruption to address 
corruption concerns in India until in or around April 2011.  
47. Because of Walmart’s failure to implement sufficient internal accounting controls 
related to anti-corruption, from in or about 2009 through in or about at least 2011, India Joint 
Venture and India Retail Business were able to retain TPIs that made improper payments to 
government officials in order to obtain store operating permits and licenses during that period. 
These improper payments were then recorded in India Joint Venture’s books and records with 
vague descriptions like “misc fees,” “miscellaneous,” “professional fees,” “incidental,” and 
“government fee.” 
Brazil  
48. Despite certain observations from Brazil Subsidiary internal audit regarding the 
Brazil Subsidiary anti-corruption related internal accounting controls weaknesses, Brazil 
Subsidiary continued to retain certain high-risk TPIs. Starting in or around 2008 to in or around 
April 2012, Brazil Subsidiary employed Brazil Construction Firm to build or renovate eight stores 
and obtain all required construction permits. Although certain Brazil Subsidiary employees were 
aware of the Brazil Construction Firm’s reputation for corruption, no due diligence was conducted 
until in or around 2009, a year after Brazil Construction Firm was engaged. That due diligence 
review cited allegations that Brazil Construction Firm had made improper payments to Brazilian 
officials for non-Walmart projects and engaged in other illegal acts for non-Walmart projects. 
Citing these allegations, the report recommended that Brazil Subsidiary not renew Brazil 
Construction Firm’s contract. Notwithstanding the due diligence results, Walmart continued to use 
Brazil Construction Firm until in or around April 2012. 
49. One of the Brazil Subsidiary projects that Brazil Construction Firm worked on was 
the construction of a new Walmart store that was originally scheduled to open on or around 
November 19, 2009. Brazil Subsidiary tasked Brazil Construction Firm with obtaining the 
construction permit and with handling all aspects of the store’s construction in May 2009. Later, 
because Brazil Construction Firm was unable to timely obtain all permits, the grand opening was 
delayed until mid-December. On or around December 7, 2009, Brazil Subsidiary’s real estate 
committee met and discussed the store project, which was on the committee’s agenda due to its 
missing operating license. At the meeting, a Brazil Subsidiary executive stated that the store 

 
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needed an “extraordinary process” to obtain the license. That same day, certain members of Brazil 
Subsidiary management approved hiring another TPI—indirectly through Brazil Construction 
Firm—to secure the license. Nine days later, the TPI obtained all governmental approvals for the 
store. The TPI received approximately $127,000, an amount greater than Brazil Subsidiary’s other 
permitting consultants, for the TPI’s efforts with these permits and certain operating permits 
obtained after the store opened. 
50. Certain Brazil Subsidiary employees expressed their concerns regarding the TPI to 
Brazil Subsidiary management prior to the TPI’s engagement. Their concerns included the 
possibility that the TPI was a government official and that the TPI did not have a formal 
corporation to accept payment. A former employee of Brazil Construction Firm later stated that the 
TPI told him at that time that when the TPI was working on obtaining the construction permit 
under the direction of Brazil Construction Firm, 1) the TPI needed cash which the TPI had 
requested from Brazil Construction Firm and had received from the former employee; and 2) the 
TPI stated the money was for “people I have to pay,” which the former employee stated he 
understood to mean would be used to provide improper payments to Brazilian government 
officials. That former Brazil Construction Firm employee later stated that he made improper 
payments himself, without the knowledge of Brazil Subsidiary, in connection with two other Brazil 
Subsidiary stores. 
51. In or around 2010, Brazil Subsidiary planned to open two other stores in the same 
area. As with the earlier project, Brazil Subsidiary engaged the same TPI at year-end to assist with 
stores that had been delayed due to licensing problems. The TPI again commanded an unusually 
high fee for the TPI’s services—approximately $400,000—and was paid indirectly through Brazil 
Subsidiary’s contractor. Despite earlier corruption concerns, no due diligence was conducted on 
the TPI prior to the TPI’s work. The TPI’s ability to obtain licenses and permits quickly earned the 
TPI the nickname “sorceress” or “genie” within Brazil Subsidiary. 
Walmart’s Subsequent Anti-Corruption Compliance Programs 
52. Although certain Walmart executives discussed revising the anti-corruption policy 
and procedures shortly after their publication in March 2005, the Company did not announce the 
launch of a “new and enhanced” anti-corruption program until on or around February 8, 2007. The 
program would feature a revised policy, new procedures, and improved auditing and investigative 
protocols—with an emphasis on training and TPI due diligence. Its rollout was scheduled to begin 
two months later and conclude in or around 2008. 
53. Walmart published the revised anti-corruption program as Company policy on or 
around December 12, 2008. However, this policy was not sufficiently implemented at that time. 
Shortly thereafter, Walmart appointed Walmart Compliance Employee as the Company’s first vice 
president of international compliance and tasked him with updating the anti-corruption compliance 
program. 
54. In or around April 2009, Walmart informed its foreign subsidiaries that it would 
soon promulgate anti-corruption standards that would be more flexible and easier and quicker to 
implement. Instead of taking a centralized approach, each country would be required to devise its 
own program based on the standards. On or around June 11, 2009, Walmart circulated to the 

 
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subsidiaries a one-page document entitled Global Anti-Corruption Standards that: 1) summarized 
the FCPA; 2) acknowledged that in certain instances Walmart may provide gifts, meals, travel, and 
entertainment to government officials; 3) noted that the standards applied to TPIs; and 4) provided 
contact information for the Company’s global ethics office. The markets were instructed to design 
and implement risk-based internal accounting controls, procedures, and training to ensure the 
standards were met. 
55. Walmart’s fiscal year 2010 FCPA reviews in Brazil, India, and Mexico identified 
certain of its anti-corruption related internal accounting controls had weaknesses in each 
subsidiary.  
56. By around April 2011, Walmart recognized that its existing anti-corruption 
compliance program was not sufficient and hired an international law firm and an international 
consulting firm to conduct a worldwide anti-corruption compliance review for the purpose of 
reviewing and testing Walmart’s anti-corruption compliance program in various foreign 
subsidiaries around the world, including in Mexico, India, Brazil, and China.  
Legal Standards and Violations 
57. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-
and-desist order upon any person who is violating, has violated, or is about to violate any provision 
of the Exchange Act or any regulation thereunder, and upon any other person that is, was, or would 
be a cause of the violation, due to an act or omission the person knew or should have known would 
contribute to such violation. 
FCPA Violations 
Books and Records Violations 
58. As a result of the conduct described above, Walmart violated Section 13(b)(2)(A) 
of the Exchange Act, which requires issuers that have a class of securities registered pursuant to 
Section 12 of the Exchange Act and issuers with reporting obligations pursuant to Section 15(d) of 
the Exchange Act to make and keep books, records, and accounts which, in reasonable detail, 
accurately and fairly reflect their transactions and dispositions of their assets. 
Internal Accounting Controls Violations 
59. As a result of the conduct described above, Walmart violated Section 13(b)(2)(B) of 
the Exchange Act, which requires issuers that have a class of securities registered pursuant to 
Section 12 of the Exchange Act and issuers with reporting obligations pursuant to Section 15(d) of 
the Exchange Act to devise and maintain a system of internal accounting controls sufficient to 
provide reasonable assurances that (i) transactions are executed in accordance with management’s 
general or specific authorization; (ii) transactions are recorded as necessary (I) to permit 
preparation of financial statements in conformity with generally accepted accounting principles or 
any other criteria applicable to such statements, and (II) to maintain accountability for assets; (iii) 
access to assets is permitted only in accordance with management’s general or specific 
authorization; and (iv) the recorded accountability for assets is compared with the existing assets at 
reasonable intervals and appropriate action is taken with respect to any differences. 

 
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Walmart’s Disclosures, Cooperation, and Remediation 
60. In determining to accept the Offer, the Commission considered Walmart’s 
disclosures, cooperation, and remedial efforts. 
61. Walmart made an initial self-disclosure of the potential FCPA violations in Mexico 
to the Commission’s staff in November 2011, after it retained outside counsel to conduct an 
internal investigation under the direction of the Audit Committee of Walmart’s Board of Directors. 
Subsequently, Walmart voluntarily expanded its investigation and disclosed its findings concerning 
Brazil, China, and India to the Commission staff, although such disclosure was after the 
Commission staff had already begun investigating the Company related to conduct in Mexico. 
62. Walmart further cooperated by identifying issues and facts that would likely be of 
interest to the Commission and the staff and providing regular updates to the staff; making regular 
factual presentations to the staff and sharing information that would not have been otherwise 
readily available to the staff; making foreign-based employees available for interviews in the 
United States; producing translations of relevant documents; and obtaining cooperation of former 
employees and third parties, including their consent to interviews. 
63. Walmart’s remedial measures include: (1) hiring a Global Chief Ethics & 
Compliance Officer , an International Chief Ethics & Compliance Officer, and a dedicated Global 
Anti-Corruption Officer, with separate reporting lines to the Audit Committee of Walmart’s Board 
of Directors; (2) adding dedicated regional and market Chief Ethics & Compliance Officers, 
foreign market anti-corruption directors, and anti-corruption compliance personnel at Walmart’s 
home office and in Walmart’s foreign markets; (3) conducting, across each of Walmart’s markets, 
enhanced monthly and quarterly anti-corruption monitoring; (4) enhancing on-site global anti-
corruption audits to test adherence to enhanced anti-corruption related internal accounting controls 
and procedures; (5) enhancing anti-corruption related internal accounting controls on the selection 
and use of third parties; (6) enhancing global anti-corruption training and awareness programs; (7) 
implementing an automated global license management system for obtaining and renewing 
licenses and permits and a global donation management system, which enhances controls relating 
to charitable donations; and (8) terminating business relationships with third parties involved in the 
conduct at issue. 
Non-Prosecution Agreement 
64. Walmart has entered into a non-prosecution agreement with the United States 
Department of Justice that acknowledges responsibility for criminal conduct relating to certain 
findings in the Order. 
Non-Imposition of a Civil Penalty 
65. Respondent acknowledges that the Commission is not imposing a civil penalty 
based upon Walmart’s payment of a $137,955,249 monetary fine as part of Walmart’s resolution 
with the United States Department of Justice. 
 

 
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IV. 
Undertakings 
66. Respondent undertakes to cooperate fully with the Commission in any and all 
investigations, litigation, or other proceedings relating to or arising from the matters described in 
this Order. In connection with such cooperation, Respondent shall: 
A. Produce, without service of a notice or subpoena, any and all non-privileged 
documents and other information requested by the Commission staff subject to any 
restrictions under the law of any foreign jurisdiction; 
B. Use its best efforts to cause its current or former officers, employees, and 
directors to be interviewed by Commission staff at such times and places as the 
Commission staff reasonably may direct; and 
C. Use its best efforts to cause its current or former officers, employees, and 
directors to appear and testify without service of a notice or subpoena in such 
investigations, depositions, hearings, or trials as may be requested by the Commission staff. 
67. Respondent undertakes to report to the Commission staff periodically, at no less 
than one-year intervals, during a two-year period from the date of this Order on the status of 
Respondent’s remediation and implementation of anti-corruption related compliance measures. 
During this two-year period, Respondent shall (1) submit an initial report, and (2) conduct and 
prepare one follow-up review and report, as described below: 
A. Respondent shall submit to the Commission staff a written report within 
twelve (12) months from the date of entry of this Order setting forth a complete 
description of its FCPA and anti-corruption related remediation efforts to date, its 
proposals reasonably designed to improve its policies and procedures for ensuring 
compliance with the FCPA and other applicable anti-corruption laws, and the parameters 
of the subsequent review (“Initial Report”). The Initial Report shall be transmitted to 
Charles Cain, Chief, FCPA Unit, Division of Enforcement, Securities and Exchange 
Commission, 100 F Street, N.E., Washington, DC 20549. Respondent may extend the 
time period for issuance of the Initial Report with prior written approval of the 
Commission staff. 
B. Respondent shall undertake one follow-up review, incorporating any 
comments provided by the Commission staff on the Initial Report, to further monitor and 
assess whether the policies and procedures of Respondent are reasonably designed to 
detect and prevent violations of the FCPA and other applicable anti-corruption laws (the 
“Follow-Up Report”). 
 
C. The Follow-Up Report shall be completed no later than twelve (12) 
months after the Initial Report. Respondent may extend the time period for issuance of 
the Follow-Up Report with prior written approval of the Commission staff. 

 
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68. The Initial Report, Follow-up Report, supporting documentation, and any related 
communications, presentations, and certifications submitted by Respondent may include 
proprietary, financial, confidential, and competitive business information. Public disclosure of 
the reports could discourage cooperation, impede pending or potential government investigations 
or undermine the objectives of the reporting requirement. For these reasons, among others, the 
reports and contents thereof are intended to remain and shall remain nonpublic, except (1) 
pursuant to court order, (2) as agreed by the parties in writing, (3) to the extent that the 
Commission determines in its sole discretion that disclosure would be in furtherance of the 
Commission’s discharge of its duties and responsibilities, or (4) is otherwise required by law. 
69. Should Respondent, during the two-year period from the date of this Order, 
discover credible evidence, not already reported to the Commission staff, that corrupt payments 
or corrupt transfers of property or interests may have been offered, promised, paid, or authorized 
by a Respondent entity or person, or any entity or person while working directly for Respondent, 
or that related false books and records have been maintained, Respondent shall promptly report 
such conduct to the Commission staff. 
70. During this two-year period from the date of this Order, Respondent shall provide 
its external auditors with its annual internal audit plan and reports of the results of internal audit 
procedures and, subject to Respondent’s attorney-client privilege and attorney work product 
protections, its assessment of its anti-corruption compliance policies and procedures. 
71. During this two-year period from the date of this Order, Respondent shall provide 
the Commission staff with any written reports or recommendations provided by Respondent’s 
external auditors in response to Respondent’s annual internal audit plan, reports of the results of 
internal audit procedures, and its assessment of its anti-corruption compliance policies and 
procedures.   
72. Respondent shall certify, in writing, compliance with the undertakings set forth 
above. The certification shall identify the undertaking(s), provide written evidence of compliance 
in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance. 
The Commission staff may make reasonable requests for further evidence of compliance, and 
Respondent agrees to provide such evidence. The certification and supporting materials shall be 
submitted to Charles Cain, Chief, FCPA Unit, Division of Enforcement, with a copy to the 
Office of the Chief Counsel of the Division of Enforcement, Securities and Exchange 
Commission, 100 F Street, N.E., Washington, DC 20549, no later than 60 days from the date of 
the completion of the undertakings. 
73. In determining whether to accept the Offer, the Commission has considered these 
undertakings. 
V. 
 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 
 A. Respondent cease and desist from committing or causing any violations and any 
future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, 15 U.S.C. §§ 
78m(b)(2)(A) and 78m(b)(2)(B). 

 
14 
 
B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 
$119,647,735 and prejudgment interest of $25,043,437 for a total payment of $144,691,172, to the 
Securities and Exchange Commission for transfer to the general fund of the United States 
Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment is not made, additional 
interest shall accrue pursuant to SEC Rule of Practice 600. Payment must be made in one of the 
following ways: 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 Payments by check or money order must be accompanied by a cover letter identifying 
Walmart as the Respondent in these proceedings, and the file number of these proceedings; a copy 
of the cover letter and check or money order must be sent to Charles Cain, Chief, FCPA Unit, 
Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 
20549. 
C. Respondent shall comply with the undertakings enumerated in Section IV, 
paragraphs 67 through 72 above. 
 By the Commission. 
 
       Vanessa A. Countryman 
       Acting Secretary 

1 

 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 86159 / June 20, 2019 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 4054 / June 20, 2019 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-19207 

 

 

In the Matter of 

 

WALMART INC.,  

 

Respondent. 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

  

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Walmart Inc. (“Walmart,” “the Company,” or 

“Respondent”). 

II. 

 In anticipation of the institution of these proceedings, Walmart has submitted an Offer of 

Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of 

these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, Respondent admits the Commission’s jurisdiction over 

Respondent and the subject matter of these proceedings, and consents to the entry of this Order 

Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act 

of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

III. 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding. 



 

2 

 

Summary 

1. This matter concerns violations of the books and records and internal accounting 

controls provisions of the Foreign Corrupt Practices Act (“FCPA”) by Walmart, a global retailer. 

From in or around July 2000 through in or around April 2011, Walmart’s subsidiaries in Brazil, 

China, India, and Mexico operated without a system of sufficient anti-corruption related internal 

accounting controls. As a result, during this time period, those Walmart subsidiaries paid certain 

third-party intermediaries (“TPIs”) without reasonable assurances that certain transactions were 

consistent with their stated purpose or consistent with the prohibition against making improper 

payments to government officials. Additionally, during this time period, when Walmart learned of 

certain anti-corruption risks, the Company did not either sufficiently investigate the allegations or 

sufficiently mitigate the known risks. 

Respondent 

2. Walmart is a Delaware corporation with its principal place of business located in 

Bentonville, Arkansas. Walmart had a class of securities registered under Section 12(b) of the 

Exchange Act during the relevant time period. The Company’s shares trade on the New York 

Stock Exchange under the ticker symbol “WMT.” 

Other Relevant Entities and Individuals 

3. Mexico Subsidiary is a Walmart subsidiary that operates retail stores in Mexico. 

Walmart has a majority equity stake in Mexico Subsidiary with the remaining shares traded on the 

Mexican Stock Exchange. 

4. China Subsidiary is Walmart’s wholly owned subsidiary that operates Walmart’s 

stores in China. 

5. Brazil Subsidiary was Walmart’s wholly owned subsidiary that operated 

Walmart’s stores in Brazil. 

6. India Joint Venture was a joint venture with India Partner that was majority 

owned and controlled by Walmart and operated wholesale stores and distribution centers in India. 

7. India Retail Business was a franchisee of Walmart that operated retail stores in 

India. 

8. India Subsidiary was Walmart’s wholly owned subsidiary that was the franchisor 

of India Retail Business. 

9. India Partner was India Subsidiary’s Joint Venture partner and the owner of India 

Retail Business. 

10. Walmart Executive was a Walmart International senior real estate employee. 

11. Walmart Lawyer was a Walmart International senior attorney. 



 

3 

 

12. Walmart Compliance Employee was a Walmart International compliance 

employee. 

13. Walmart Investigator was a Walmart special investigator. 

14. Mexico Subsidiary Executive A was a Mexico Subsidiary senior officer. 

15. Mexico Subsidiary Executive B was a Mexico Subsidiary senior real estate 

executive. 

 

16. Mexico Subsidiary Lawyer A was a Mexico Subsidiary real estate attorney. 

17. Mexico Subsidiary Lawyer B was a Mexico Subsidiary senior attorney. 

18. Mexico Subsidiary Internal Auditor was a Mexico Subsidiary senior audit 

employee. 

19. Outside Lawyer was an attorney retained by Walmart to investigate certain anti-

corruption allegations in Mexico. 

20. Brazil Construction Firm was a construction firm retained by Brazil Subsidiary to 

build and renovate certain stores in Brazil. 

FACTS 

Background 

21. At the end of Walmart’s fiscal year 1990, the Company had 1,528 stores which had 

generated annual sales of $26 billion—all within the United States. Walmart, recognizing that 

international expansion could help it become the world’s largest retailer, entered its first foreign 

market, Mexico, in 1991. In 1993, Walmart established Walmart International as an operating 

segment, headquartered in Bentonville, Arkansas, responsible for overseeing the Company’s 

operations outside the United States. Between 1994 and 1996, the Company established additional 

outposts in other countries, including Brazil and China. During fiscal year 2010, the year in which 

Walmart opened its first Indian wholesale outlet, the Company operated stores in 14 foreign 

countries, with international sales of approximately $100 billion. 

 

22. Walmart’s formula for success centered on Everyday Low Prices and Everyday 

Low Cost. Walmart’s rapid international growth, combined with its low-cost philosophy, 

contributed to the Company’s insufficient anti-corruption related internal accounting controls in 

Walmart’s subsidiaries in Mexico, India, China, and Brazil from in or around July 2000 until in or 

around April 2011. 

Early Corruption Warnings 

23. In or around 2002 and 2003, Walmart received a request for FCPA training from 

China Subsidiary and also a request for a detailed FCPA policy covering TPIs and joint venture 

partners for China Subsidiary. Walmart did not immediately provide widespread anti-corruption 



 

4 

 

training to China Subsidiary or implement TPI and joint venture anti-corruption policies at China 

Subsidiary. 

24. In or around June 2003, China Subsidiary identified a potentially troubling 

historical payment made by a certain China Subsidiary joint venture. In 1999 or 2000, the joint 

venture had entered into an agreement to pay RMB 500,000 (approximately $60,000) to the 

landlord of a China Subsidiary store for government relationship consulting services and various 

permits. The permit costs should have likely been nominal but China Subsidiary did not further 

inquire into the matter at the time. 

25. In or around October 2003, China Subsidiary’s internal audit team analyzed gifts 

with an average dollar value of less than $20 given to Chinese government officials by China 

Subsidiary corporate affairs employees and small amounts of cash provided to other Chinese 

officials for travel and meal expenses related to business meetings by the Chinese partner of a 

China Subsidiary joint venture. China Subsidiary’s internal audit team observed that these 

transactions appeared to be inconsistent with corporate policy. China Subsidiary’s internal audit 

team also observed that certain China Subsidiary anti-corruption related internal accounting 

controls had weaknesses. In response, Walmart did not promptly implement all of China 

Subsidiary internal audit’s suggested remedial actions. 

Walmart’s First Anti-Corruption Compliance Program 

26. In or around 2001, Walmart’s anti-corruption policy consisted of a paragraph in the 

Company’s Statement of Ethics. The paragraph summarized the FCPA’s prohibitions and 

described the statute’s facilitating payment exception and the procedure for making such payments. 

In or around July 2002, Walmart planned to implement a worldwide comprehensive anti-

corruption compliance and training program within a few months. In or around 2003, Walmart 

prepared draft anti-corruption compliance materials. However, nearly a year passed before the 

Company took additional steps to revise the proposed anti-corruption compliance program. 

27. Walmart published its International Anti-Corruption Policy and Procedures on or 

around March 21, 2005, and distributed them to the Company’s foreign markets. In or around 

November 2005, the implementation of Walmart’s anti-corruption compliance program was 

formally put on hold until further notice. 

Mexico 

28. On or around September 21, 2005, Mexico Subsidiary Lawyer A, who had been 

separated from Mexico Subsidiary over a year earlier, wrote an email to Walmart Lawyer. In the 

email, Mexico Subsidiary Lawyer A stated that he was responsible for many real estate projects in 

Mexico from 1975 through 2004 and wrote, “[I]f you’re interested to know confidential details 

about the way we achieved 300 projects…contact me and in that case, I would ask you do it before 

you contact [Mexico Subsidiary] because the kind of issues (for instance, we used to undercover 

expenses identified with a code known and authorized by the highest levels).”  

29. Walmart retained Outside Lawyer to advise the Company in response to Mexico 

Subsidiary Lawyer A’s allegations. During the first half of October 2005, Outside Lawyer 

interviewed Mexico Subsidiary Lawyer A twice. Mexico Subsidiary Lawyer A alleged that during 



 

5 

 

his last six to seven years at Mexico Subsidiary, Mexico Subsidiary had very aggressive growth 

goals that required new stores to open in record time. He further alleged that Mexico Subsidiary 

frequently employed TPIs, known as gestores, who in some cases made improper payments to 

Mexican government officials to obtain licenses, permits, and other approvals for certain store 

projects in Mexico. He also detailed several projects where he claimed Mexico Subsidiary made 

improper payments to obtain licenses, permits, and other approvals.  

30. Mexico Subsidiary Lawyer A alleged the scheme worked in the following manner: 

a. Mexico Subsidiary would determine which government officials 

needed to receive an improper payment to obtain a permit or license. 

Mexico Subsidiary Lawyer A would then tell one of the gestores 

which official to make an improper payment to and then obtained 

checks from Mexico Subsidiary payable to the gestores.  

b. The gestores cashed the checks and delivered the agreed-upon 

improper payments.  

c. Occasionally, the officials preferred to deal only with Mexico 

Subsidiary Lawyer A. In those instances, according to Mexico 

Subsidiary Lawyer A, the gestores provided cash to Mexico 

Subsidiary Lawyer A who made the improper payments himself.  

d. Mexico Subsidiary Lawyer A and Mexico Subsidiary Executive B 

developed a system of three-digit codes, or claves, which were typed 

or handwritten on the gestores’ invoices and tracked the improper 

benefits obtained by Mexico Subsidiary.  

e. The clave descriptions included: “avoidance or omission of 

requirement;” “influence, control, or knowledge of privileged 

information in the head of the governmental office;” and “payments 

to eliminate fines.” 

f. Mexico Subsidiary Lawyer A claimed that Mexico Subsidiary 

Executive A, Mexico Subsidiary Internal Auditor, and Mexico 

Subsidiary Lawyer B—who had been named Mexico Subsidiary’s 

compliance officer after Mexico Subsidiary Lawyer A left Mexico 

Subsidiary—also participated in the scheme. 

31. Mexico Subsidiary’s use of real estate gestores stopped after Mexico Subsidiary 

Lawyer A was separated from the Company in or around August 2004 and before Walmart’s 2005 

investigation into the gestores allegations. 

32. Walmart retained a law firm to initially advise the Company regarding Mexico 

Subsidiary Lawyer A’s allegations and decided to use internal audit and corporate investigations 

employees to conduct an investigation in Mexico. In mid-November 2005, these “preliminary 

inquiry” teams spent two weeks in Mexico investigating the allegations. While there, they 

identified a draft March 2004 Mexico Subsidiary internal audit review of gestoria payments that 



 

6 

 

had not previously been shared with Walmart internal audit executives and employees in the 

United States. The final report that was sent to Walmart in December 2004 omitted references, 

contained in earlier versions, to MXN $45.6 million (approximately USD $4 million) paid to one 

of the gestores that Mexico Subsidiary Lawyer A alleged was corrupt. While the draft report stated 

that the transactions reviewed were reasonably appropriate, complied with documentation and 

classification standards, and were compliant with local policies, legislation and generally accepted 

accounting principles, it also described “unusual” and “facilitating” payments made in connection 

with Mexico Subsidiary’s use of gestores. The final report provided to Walmart in December 2004 

had also omitted these references to suspicious transactions. 

33. In or around November 2005, a Mexico Subsidiary employee explained to 

investigators that when problems arose when obtaining licenses, Mexico Subsidiary typically 

negotiated a payment with the relevant official to resolve the problem. The same employee, 

although unsure whether improper payments were made to government officials, said that Mexico 

Subsidiary utilized gestores to “smooth out the road” so that “there would not be any bumps during 

the request for a license.” The employee also conceded that it was unusual that Mexico Subsidiary 

paid the gestores when most of the payments were supported by only one invoice and that no 

records showed what work they did, with whom they met, or how many hours they worked. 

34. In or around December 2005, Walmart Investigator circulated a report concerning 

the Mexico Subsidiary allegations that stated that laws had been potentially violated, and 

recommended several additional investigative steps. 

35. Walmart internal audit produced its own report one week later, which indicated that 

the work performed constituted only a preliminary review of the gestoria payments and that the 

auditors were unable to determine how the gestores used the funds received from Mexico 

Subsidiary. The report also made several recommendations for investigative next steps. 

36. Walmart did not follow the investigators’ proposed action plans. On or around 

February 7, 2006, Walmart tasked Mexico Subsidiary Lawyer B with leading the remainder of the 

investigation.   

37. In March 2006, Mexico Subsidiary Lawyer B prepared his investigative report, 

which concluded that the corruption allegations were unsubstantiated. However, it did 

acknowledge that certain of Mexico Subsidiary’s anti-corruption related internal accounting 

controls were deficient and, although some improvements had been made, certain additional anti-

corruption related internal accounting controls were recommended. Walmart did not address those 

recommendations by implementing sufficient anti-corruption related internal accounting controls 

until in or around April 2011. 

38. Another corruption risk identified was Mexico Subsidiary’s practice of donations in 

the form of checks, cash, and merchandise to Mexican municipalities and local government 

entities. In some instances, the donations were made around the time Mexico Subsidiary obtained 

permits and licenses or other government approvals. Some of the goods donated, such as cars and 

computers, were capable of being converted to personal use. Mexico Subsidiary did not implement 

sufficient internal accounting controls regarding the use of donations until in or around April 2011. 



 

7 

 

China 

39. Between in or around 2006 to in or around early 2011, China Subsidiary’s internal 

audit team identified certain weaknesses in anti-corruption related internal accounting controls. In 

January 2006, it observed: China Subsidiary’s draft anti-corruption policy and procedures were 

inconsistent with the policy adopted by Walmart in or around March 2005; China Subsidiary’s 

policy excluded employees of state-owned and state-controlled enterprises from the definition of 

“government official;” and formal anti-corruption training at China Subsidiary had not yet been 

provided and most Chinese managers were unfamiliar with the FCPA and misunderstood the 

concept of facilitating payments. Other anti-corruption related internal accounting controls 

weaknesses at China Subsidiary observed by China Subsidiary internal audit included lack of TPI 

retention procedures and lack of a charitable donation policy. Although internal audit raised 

recurring issues during this time period, China Subsidiary’s anti-corruption related internal 

accounting controls were not improved until in or around April 2011. 

India 

40. In or around late 2006, Walmart conducted a review of India Partner. The initial 

due diligence, while generally positive, raised certain anti-corruption red flags about doing 

business in India. One report stated that Walmart would “be targeted by corrupt individuals and 

organizations seeking bribes or kickbacks in exchange for favorable business relationships or the 

easing of bureaucratic restrictions.” The report also said that corruption would likely cause 

Walmart “delays in the processing of permits, licenses and other paperwork.” The report suggested 

that Walmart could mitigate its corruption risk with “[s]trict adherence” to the FCPA and by 

establishing “strong internal controls and management oversight.” 

41. In or around November 2006, prior to the formation of India Joint Venture, a 

Walmart real estate employee wrote to Walmart Executive that he had received a “wink and nod” 

when he “brought up transparency and clean transactions relative to the FCPA” with an employee 

of India Partner. The India Partner employee also admitted that “speed payments” were used in the 

past by India Partner. Walmart did not sufficiently address the Walmart real estate employee’s 

warning prior to forming India Joint Venture. 

42. Because of certain anti-corruption related red flags, Walmart obtained additional 

due diligence reports and reviewed their results.   

43. Walmart entered the Indian market in partnership with India Partner. Due to foreign 

direct investment restrictions, Walmart proposed that retail operations initially be franchised to 

India Partner with a wholesale business structured as a joint venture majority owned by Walmart. 

In or around August 2007, Walmart and India Partner executed franchise and joint venture 

agreements. Walmart tasked its partner with obtaining all licenses, permits, certifications, and 

zoning for retail stores in India. 

44. Between in or around March 2009 and in or around January 2011, Walmart’s 

internal audit team in India conducted at least three reviews of India Subsidiary and India Joint 

Venture. All of those reviews identified certain weaknesses in anti-corruption related internal 

accounting controls that required remediation, which were not immediately addressed. During this 



 

8 

 

time period, Walmart continued to rely on India Partner for permitting, licensing, and real estate 

matters for retail stores in India. 

45. In or around July 23, 2011, an anonymous source sent an email to certain Walmart 

executives alleging several issues. According to the anonymous email, an employee of India Joint 

Venture and an employee of India Retail Business were involved in a scheme to make improper 

payments to government officials to obtain store operating permits and licenses, and that a senior 

legal employee of India Joint Venture knew about the scheme. Although one executive requested 

that Walmart investigators examine the allegations, Walmart did not conduct an inquiry at that 

time. 

46. Despite the audit reports discussing control deficiencies and the anonymous email 

alleging improper payments to government officials, Walmart did not begin to implement and 

maintain a system of sufficient internal accounting controls related to anti-corruption to address 

corruption concerns in India until in or around April 2011.  

47. Because of Walmart’s failure to implement sufficient internal accounting controls 

related to anti-corruption, from in or about 2009 through in or about at least 2011, India Joint 

Venture and India Retail Business were able to retain TPIs that made improper payments to 

government officials in order to obtain store operating permits and licenses during that period. 

These improper payments were then recorded in India Joint Venture’s books and records with 

vague descriptions like “misc fees,” “miscellaneous,” “professional fees,” “incidental,” and 

“government fee.” 

Brazil  

48. Despite certain observations from Brazil Subsidiary internal audit regarding the 

Brazil Subsidiary anti-corruption related internal accounting controls weaknesses, Brazil 

Subsidiary continued to retain certain high-risk TPIs. Starting in or around 2008 to in or around 

April 2012, Brazil Subsidiary employed Brazil Construction Firm to build or renovate eight stores 

and obtain all required construction permits. Although certain Brazil Subsidiary employees were 

aware of the Brazil Construction Firm’s reputation for corruption, no due diligence was conducted 

until in or around 2009, a year after Brazil Construction Firm was engaged. That due diligence 

review cited allegations that Brazil Construction Firm had made improper payments to Brazilian 

officials for non-Walmart projects and engaged in other illegal acts for non-Walmart projects. 

Citing these allegations, the report recommended that Brazil Subsidiary not renew Brazil 

Construction Firm’s contract. Notwithstanding the due diligence results, Walmart continued to use 

Brazil Construction Firm until in or around April 2012. 

49. One of the Brazil Subsidiary projects that Brazil Construction Firm worked on was 

the construction of a new Walmart store that was originally scheduled to open on or around 

November 19, 2009. Brazil Subsidiary tasked Brazil Construction Firm with obtaining the 

construction permit and with handling all aspects of the store’s construction in May 2009. Later, 

because Brazil Construction Firm was unable to timely obtain all permits, the grand opening was 

delayed until mid-December. On or around December 7, 2009, Brazil Subsidiary’s real estate 

committee met and discussed the store project, which was on the committee’s agenda due to its 

missing operating license. At the meeting, a Brazil Subsidiary executive stated that the store 



 

9 

 

needed an “extraordinary process” to obtain the license. That same day, certain members of Brazil 

Subsidiary management approved hiring another TPI—indirectly through Brazil Construction 

Firm—to secure the license. Nine days later, the TPI obtained all governmental approvals for the 

store. The TPI received approximately $127,000, an amount greater than Brazil Subsidiary’s other 

permitting consultants, for the TPI’s efforts with these permits and certain operating permits 

obtained after the store opened. 

50. Certain Brazil Subsidiary employees expressed their concerns regarding the TPI to 

Brazil Subsidiary management prior to the TPI’s engagement. Their concerns included the 

possibility that the TPI was a government official and that the TPI did not have a formal 

corporation to accept payment. A former employee of Brazil Construction Firm later stated that the 

TPI told him at that time that when the TPI was working on obtaining the construction permit 

under the direction of Brazil Construction Firm, 1) the TPI needed cash which the TPI had 

requested from Brazil Construction Firm and had received from the former employee; and 2) the 

TPI stated the money was for “people I have to pay,” which the former employee stated he 

understood to mean would be used to provide improper payments to Brazilian government 

officials. That former Brazil Construction Firm employee later stated that he made improper 

payments himself, without the knowledge of Brazil Subsidiary, in connection with two other Brazil 

Subsidiary stores. 

51. In or around 2010, Brazil Subsidiary planned to open two other stores in the same 

area. As with the earlier project, Brazil Subsidiary engaged the same TPI at year-end to assist with 

stores that had been delayed due to licensing problems. The TPI again commanded an unusually 

high fee for the TPI’s services—approximately $400,000—and was paid indirectly through Brazil 

Subsidiary’s contractor. Despite earlier corruption concerns, no due diligence was conducted on 

the TPI prior to the TPI’s work. The TPI’s ability to obtain licenses and permits quickly earned the 

TPI the nickname “sorceress” or “genie” within Brazil Subsidiary. 

Walmart’s Subsequent Anti-Corruption Compliance Programs 

52. Although certain Walmart executives discussed revising the anti-corruption policy 

and procedures shortly after their publication in March 2005, the Company did not announce the 

launch of a “new and enhanced” anti-corruption program until on or around February 8, 2007. The 

program would feature a revised policy, new procedures, and improved auditing and investigative 

protocols—with an emphasis on training and TPI due diligence. Its rollout was scheduled to begin 

two months later and conclude in or around 2008. 

53. Walmart published the revised anti-corruption program as Company policy on or 

around December 12, 2008. However, this policy was not sufficiently implemented at that time. 

Shortly thereafter, Walmart appointed Walmart Compliance Employee as the Company’s first vice 

president of international compliance and tasked him with updating the anti-corruption compliance 

program. 

54. In or around April 2009, Walmart informed its foreign subsidiaries that it would 

soon promulgate anti-corruption standards that would be more flexible and easier and quicker to 

implement. Instead of taking a centralized approach, each country would be required to devise its 

own program based on the standards. On or around June 11, 2009, Walmart circulated to the 



 

10 

 

subsidiaries a one-page document entitled Global Anti-Corruption Standards that: 1) summarized 

the FCPA; 2) acknowledged that in certain instances Walmart may provide gifts, meals, travel, and 

entertainment to government officials; 3) noted that the standards applied to TPIs; and 4) provided 

contact information for the Company’s global ethics office. The markets were instructed to design 

and implement risk-based internal accounting controls, procedures, and training to ensure the 

standards were met. 

55. Walmart’s fiscal year 2010 FCPA reviews in Brazil, India, and Mexico identified 

certain of its anti-corruption related internal accounting controls had weaknesses in each 

subsidiary.  

56. By around April 2011, Walmart recognized that its existing anti-corruption 

compliance program was not sufficient and hired an international law firm and an international 

consulting firm to conduct a worldwide anti-corruption compliance review for the purpose of 

reviewing and testing Walmart’s anti-corruption compliance program in various foreign 

subsidiaries around the world, including in Mexico, India, Brazil, and China.  

Legal Standards and Violations 

57. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-

and-desist order upon any person who is violating, has violated, or is about to violate any provision 

of the Exchange Act or any regulation thereunder, and upon any other person that is, was, or would 

be a cause of the violation, due to an act or omission the person knew or should have known would 

contribute to such violation. 

FCPA Violations 

Books and Records Violations 

58. As a result of the conduct described above, Walmart violated Section 13(b)(2)(A) 

of the Exchange Act, which requires issuers that have a class of securities registered pursuant to 

Section 12 of the Exchange Act and issuers with reporting obligations pursuant to Section 15(d) of 

the Exchange Act to make and keep books, records, and accounts which, in reasonable detail, 

accurately and fairly reflect their transactions and dispositions of their assets. 

Internal Accounting Controls Violations 

59. As a result of the conduct described above, Walmart violated Section 13(b)(2)(B) of 

the Exchange Act, which requires issuers that have a class of securities registered pursuant to 

Section 12 of the Exchange Act and issuers with reporting obligations pursuant to Section 15(d) of 

the Exchange Act to devise and maintain a system of internal accounting controls sufficient to 

provide reasonable assurances that (i) transactions are executed in accordance with management’s 

general or specific authorization; (ii) transactions are recorded as necessary (I) to permit 

preparation of financial statements in conformity with generally accepted accounting principles or 

any other criteria applicable to such statements, and (II) to maintain accountability for assets; (iii) 

access to assets is permitted only in accordance with management’s general or specific 

authorization; and (iv) the recorded accountability for assets is compared with the existing assets at 

reasonable intervals and appropriate action is taken with respect to any differences. 



 

11 

 

Walmart’s Disclosures, Cooperation, and Remediation 

60. In determining to accept the Offer, the Commission considered Walmart’s 

disclosures, cooperation, and remedial efforts. 

61. Walmart made an initial self-disclosure of the potential FCPA violations in Mexico 

to the Commission’s staff in November 2011, after it retained outside counsel to conduct an 

internal investigation under the direction of the Audit Committee of Walmart’s Board of Directors. 

Subsequently, Walmart voluntarily expanded its investigation and disclosed its findings concerning 

Brazil, China, and India to the Commission staff, although such disclosure was after the 

Commission staff had already begun investigating the Company related to conduct in Mexico. 

62. Walmart further cooperated by identifying issues and facts that would likely be of 

interest to the Commission and the staff and providing regular updates to the staff; making regular 

factual presentations to the staff and sharing information that would not have been otherwise 

readily available to the staff; making foreign-based employees available for interviews in the 

United States; producing translations of relevant documents; and obtaining cooperation of former 

employees and third parties, including their consent to interviews. 

63. Walmart’s remedial measures include: (1) hiring a Global Chief Ethics & 

Compliance Officer , an International Chief Ethics & Compliance Officer, and a dedicated Global 

Anti-Corruption Officer, with separate reporting lines to the Audit Committee of Walmart’s Board 

of Directors; (2) adding dedicated regional and market Chief Ethics & Compliance Officers, 

foreign market anti-corruption directors, and anti-corruption compliance personnel at Walmart’s 

home office and in Walmart’s foreign markets; (3) conducting, across each of Walmart’s markets, 

enhanced monthly and quarterly anti-corruption monitoring; (4) enhancing on-site global anti-

corruption audits to test adherence to enhanced anti-corruption related internal accounting controls 

and procedures; (5) enhancing anti-corruption related internal accounting controls on the selection 

and use of third parties; (6) enhancing global anti-corruption training and awareness programs; (7) 

implementing an automated global license management system for obtaining and renewing 

licenses and permits and a global donation management system, which enhances controls relating 

to charitable donations; and (8) terminating business relationships with third parties involved in the 

conduct at issue. 

Non-Prosecution Agreement 

64. Walmart has entered into a non-prosecution agreement with the United States 

Department of Justice that acknowledges responsibility for criminal conduct relating to certain 

findings in the Order. 

Non-Imposition of a Civil Penalty 

65. Respondent acknowledges that the Commission is not imposing a civil penalty 

based upon Walmart’s payment of a $137,955,249 monetary fine as part of Walmart’s resolution 

with the United States Department of Justice. 

 



 

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IV. 

Undertakings 

66. Respondent undertakes to cooperate fully with the Commission in any and all 

investigations, litigation, or other proceedings relating to or arising from the matters described in 

this Order. In connection with such cooperation, Respondent shall: 

A. Produce, without service of a notice or subpoena, any and all non-privileged 

documents and other information requested by the Commission staff subject to any 

restrictions under the law of any foreign jurisdiction; 

B. Use its best efforts to cause its current or former officers, employees, and 

directors to be interviewed by Commission staff at such times and places as the 

Commission staff reasonably may direct; and 

C. Use its best efforts to cause its current or former officers, employees, and 

directors to appear and testify without service of a notice or subpoena in such 

investigations, depositions, hearings, or trials as may be requested by the Commission staff. 

67. Respondent undertakes to report to the Commission staff periodically, at no less 

than one-year intervals, during a two-year period from the date of this Order on the status of 

Respondent’s remediation and implementation of anti-corruption related compliance measures. 

During this two-year period, Respondent shall (1) submit an initial report, and (2) conduct and 

prepare one follow-up review and report, as described below: 

A. Respondent shall submit to the Commission staff a written report within 

twelve (12) months from the date of entry of this Order setting forth a complete 

description of its FCPA and anti-corruption related remediation efforts to date, its 

proposals reasonably designed to improve its policies and procedures for ensuring 

compliance with the FCPA and other applicable anti-corruption laws, and the parameters 

of the subsequent review (“Initial Report”). The Initial Report shall be transmitted to 

Charles Cain, Chief, FCPA Unit, Division of Enforcement, Securities and Exchange 

Commission, 100 F Street, N.E., Washington, DC 20549. Respondent may extend the 

time period for issuance of the Initial Report with prior written approval of the 

Commission staff. 

B. Respondent shall undertake one follow-up review, incorporating any 

comments provided by the Commission staff on the Initial Report, to further monitor and 

assess whether the policies and procedures of Respondent are reasonably designed to 

detect and prevent violations of the FCPA and other applicable anti-corruption laws (the 

“Follow-Up Report”). 

 

C. The Follow-Up Report shall be completed no later than twelve (12) 

months after the Initial Report. Respondent may extend the time period for issuance of 

the Follow-Up Report with prior written approval of the Commission staff. 



 

13 

 

68. The Initial Report, Follow-up Report, supporting documentation, and any related 

communications, presentations, and certifications submitted by Respondent may include 

proprietary, financial, confidential, and competitive business information. Public disclosure of 

the reports could discourage cooperation, impede pending or potential government investigations 

or undermine the objectives of the reporting requirement. For these reasons, among others, the 

reports and contents thereof are intended to remain and shall remain nonpublic, except (1) 

pursuant to court order, (2) as agreed by the parties in writing, (3) to the extent that the 

Commission determines in its sole discretion that disclosure would be in furtherance of the 

Commission’s discharge of its duties and responsibilities, or (4) is otherwise required by law. 

69. Should Respondent, during the two-year period from the date of this Order, 

discover credible evidence, not already reported to the Commission staff, that corrupt payments 

or corrupt transfers of property or interests may have been offered, promised, paid, or authorized 

by a Respondent entity or person, or any entity or person while working directly for Respondent, 

or that related false books and records have been maintained, Respondent shall promptly report 

such conduct to the Commission staff. 

70. During this two-year period from the date of this Order, Respondent shall provide 

its external auditors with its annual internal audit plan and reports of the results of internal audit 

procedures and, subject to Respondent’s attorney-client privilege and attorney work product 

protections, its assessment of its anti-corruption compliance policies and procedures. 

71. During this two-year period from the date of this Order, Respondent shall provide 

the Commission staff with any written reports or recommendations provided by Respondent’s 

external auditors in response to Respondent’s annual internal audit plan, reports of the results of 

internal audit procedures, and its assessment of its anti-corruption compliance policies and 

procedures.   

72. Respondent shall certify, in writing, compliance with the undertakings set forth 

above. The certification shall identify the undertaking(s), provide written evidence of compliance 

in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance. 

The Commission staff may make reasonable requests for further evidence of compliance, and 

Respondent agrees to provide such evidence. The certification and supporting materials shall be 

submitted to Charles Cain, Chief, FCPA Unit, Division of Enforcement, with a copy to the 

Office of the Chief Counsel of the Division of Enforcement, Securities and Exchange 

Commission, 100 F Street, N.E., Washington, DC 20549, no later than 60 days from the date of 

the completion of the undertakings. 

73. In determining whether to accept the Offer, the Commission has considered these 

undertakings. 

V. 

 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 

 A. Respondent cease and desist from committing or causing any violations and any 

future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, 15 U.S.C. §§ 

78m(b)(2)(A) and 78m(b)(2)(B). 



 

14 

 

B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 

$119,647,735 and prejudgment interest of $25,043,437 for a total payment of $144,691,172, to the 

Securities and Exchange Commission for transfer to the general fund of the United States 

Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment is not made, additional 

interest shall accrue pursuant to SEC Rule of Practice 600. Payment must be made in one of the 

following ways: 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 Payments by check or money order must be accompanied by a cover letter identifying 

Walmart as the Respondent in these proceedings, and the file number of these proceedings; a copy 

of the cover letter and check or money order must be sent to Charles Cain, Chief, FCPA Unit, 

Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 

20549. 

C. Respondent shall comply with the undertakings enumerated in Section IV, 

paragraphs 67 through 72 above. 

 By the Commission. 

 

       Vanessa A. Countryman 

       Acting Secretary 

http://www.sec.gov/about/offices/ofm.htm