SEC: Walmart’s Reporting Lacks Transparency
Posted on August 7, 2012 by jway
The Securities and Exchange Commission (SEC) announced today that Walmart’s filings with the agency did not sufficiently explain the potential impact that the legal proceedings facing Walmart could have on the company. Walmart has tried to downplay the losses it could potentially face related to the alleged bribery and cover-up scandal. According to Reuters, the SEC released the letters exchanged between the agency and Walmart on Monday.
After a routine review of the filings, “the SEC asked the world’s largest retailer to provide greater detail about the outcome of legal proceedings, such as the range of a possible loss from litigation. If no range could be provided, the SEC asked that Walmart provide a reason why such an estimate could not be given.”
In response, Walmart agreed to change its most recent disclosure. The company eliminated a line about the unpredictability of the outcome of the legal proceedings. Now the filings will instead read: “Management does not believe any possible loss or the range of any possible loss that may be incurred in connection with this matter will be material to the Company’s financial condition or results of operations.”
Despite Walmart’s apparent denial that investigations of alleged FCPA violations might lead to “material” losses for the company, CityWire reports that “analysts agree fines related the Mexican bribery probe could be steep.”
In its review, the SEC also found Walmart’s reporting on cyber-security lacking. Reuters’ report goes on to state that “the SEC asked if any security breaches through cyber attacks have occurred in the past, and asked the retailer to expand its risk factor statement in the future to disclose such information. Walmart said computer hackers make numerous attempts to breach the company’s information systems each year,” though none have been successful in accessing workers’, employees’, or suppliers’ personal information.
This post was written by Rebecca Cassler.