What is the total financial impact of the settlement on Walmart?

Walmart will pay a total of $282.65 million to the DOJ and SEC. However, the company had previously accrued approximately $283 million for this anticipated settlement in prior years. Therefore, the actual payment is not expected to have any further meaningful impact on Walmart's results of operations or financial condition.

What were the investigations about?

The investigations, which began in 2011 and were voluntarily disclosed by Walmart, concerned alleged violations of the U.S. Foreign Corrupt Practices Act (FCPA) and other potential crimes or misconduct in Walmart's foreign subsidiaries, including in Mexico, Brazil, India, and China. The investigations also looked into whether previous allegations were handled appropriately.

What are the key terms of the agreements with the DOJ and SEC?

The resolution includes a three-year Non-Prosecution Agreement (NPA) with the DOJ, requiring a $137.96 million penalty and ongoing compliance efforts with a monitorship. Walmart's Brazilian subsidiary pleaded guilty to a FCPA books and records violation and will pay $4.3 million. The SEC issued a Cease-and-Desist Order, with Walmart agreeing to pay $144.69 million in disgorgement and interest.

What obligations does Walmart have moving forward?

Walmart must maintain and enhance its anti-corruption compliance programs. It will be subject to a limited monitorship for at least two years by a third party to oversee its compliance program, with a potential extension. Additionally, the company has reporting obligations to the DOJ and SEC for a specified period and an agreement with the EPA to avoid debarment from federal programs.

WMT 8-K SEC Disclosure — Jun 20, 2019

Summary

Walmart Inc. (WMT) has announced a resolution with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) regarding investigations into alleged FCPA violations and other misconduct in its foreign subsidiaries, notably Wal-Mart de México. The company has agreed to a total settlement payment of $282.65 million, comprising penalties, disgorgement, and interest. This settlement resolves investigations dating back to 2011, which encompassed alleged bribery and improper handling of violations. Importantly, Walmart had previously accrued approximately $283 million for this anticipated settlement, meaning the actual payment will have no material impact on the company's financial condition or results of operations. The resolution includes a non-prosecution agreement with the DOJ for three years, a guilty plea by its Brazilian subsidiary for a books and records violation, and a cease-and-desist order from the SEC. As part of these agreements, Walmart will maintain enhanced anti-corruption compliance programs and undergo a limited monitorship.

Key Highlights

1Walmart will pay a total of $282.65 million to resolve investigations by the DOJ and SEC related to FCPA violations and other misconduct in foreign subsidiaries.
2The company had already accrued the settlement amount, thus no material impact on current financial results or condition is expected.
3A Non-Prosecution Agreement (NPA) with the DOJ requires a $137.96 million penalty and a three-year compliance program with a two-year monitorship.
4Walmart's Brazilian subsidiary has entered into a Plea Agreement and will pay $4.3 million for a FCPA books and records violation.
5The SEC has issued a Cease-and-Desist Order, requiring Walmart to pay $144.69 million in disgorgement and interest.
6Walmart has also entered into an Administrative Agreement with the EPA to resolve potential debarment or suspension from federal programs due to the DOJ and SEC settlements.
7The company has strengthened its global anti-corruption compliance program throughout the investigation process.

Walmart Inc. 8-K Report, Corporate Update (Jun 20, 2019)

Summary

Key Highlights

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