Wal-Mart Wal-Mex

Wal-Mart Stores Inc. ducked a lawsuit that would have held it accountable to shareholders for a stock dive following revelations that bribery may have aided the rapid growth of its Mexican unit.

Manhattan federal judge Katherine Polk Failla on Monday rejected claims by Michael Fogel, made on behalf of a class of Wal-Mart de Mexico SAB de CV investors, that concealing an internal investigation of bribery by the company, as outlined in a 2012 New York Times article, amounted to violations of securities laws.

In the two days following the article’s publication, which detailed a scheme by Wal-Mex to grow faster than competitors could react by bribing its way to licenses and permits for building and acquiring locations, shares of the retail unit fell more than 12 percent and then another 4 percent.

The U.S Justice Department subsequently launched a still-ongoing probe into possible Foreign Corrupt Practices Act violations and, by early 2014, Wal-Mex said it would be focusing on remodeling existing locations, rather than opening new ones.

Judge Failla found “many pleading deficiencies” in Fogel’s complaint.

She nixed the bulk of Fogel’s claims because they were simply brought too late. The alleged bribery scheme and an internal Wal-Mart investigation surrounding it occurred in 2005, leaving the retailer protected by a five-year statute of repose under the Sarbanes-Oxley Act. Fogel launched the suit in 2013, the year after the exposé into Wal-Mart’s practices was published.

“The Sarbanes-Oxley statute of repose bars, without exception, all of plaintiff’s claims that were brought more than five years after the Exchange Act violation on which they are premised,” Judge Failla said.

She went on to find that any allegations against Wal-Mart and Wal-Mex, along with former Wal-Mex chief executive officer Scot Rank and former board member Ernesto Vega, which Fogle didn’t touch on in his initial 2013 complaint, are also too late to be considered.

Fogel first filed suit only against Wal-Mex and Vega, apparently without reference to Wal-Mart or Rank at all, and later expanded those claims while adding Wal-Mart and Rank as defendants.

“Plaintiff has never suggested that he made a mistake of law or fact when he sued Wal-Mex and Vega but not Rank and Wal-Mart,” Judge Failla noted. “Plaintiff knew at the time he brought this case that Rank was the ceo of Wal-Mex. He also knew that Wal-Mart was Wal-Mex’s parent company.”

Any remaining claims against the defendants were dismissed on similar grounds of timeliness or for being inadequately pleaded, according to the order.

Fogle has 30 days to notify the U.S. Court of Appeals for the Second Circuit if he intends to appeal Judge Failla’s ruling.

Representatives for Fogle could not be reached immediately for comment. A Wal-Mart spokesman said, “We appreciate the court’s careful consideration of the issues and are pleased with the decision dismissing these claims.”

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