Global Expansion Efforts of Movie Studios, Walmart Under Federal Scrutiny

April 25, 2012 · Posted in M&E Daily, Today's M&E Connections 

American companies’ global expansion efforts have long been subject to the anti-bribery provisions of the federal Foreign Corrupt Practices Act (FCPA), but the potential implications of the law on the country’s media & entertainment industry — as well as the world’s largest retailer — have suddenly been brought to the fore.

On Tuesday, Reuters reported that the Securities and Exchange Commission (SEC) has begun investigating whether illegal payments have paved movie studios’ road into China for theatrical productions and exhibitions. So far, the SEC is scrutinizing activities of at least three studios in what has been viewed as a crucial new market for Hollywood — and a success story for the Obama administration.

More on the studio investigation at The New York Times, which published a report on Saturday that alleged widespread bribery among Walmart’s retail operations in Mexico during the previous decade. While Walmart has reportedly disclosed results of an internal investigation to the SEC and the Department of Justice, the Times report prompted a sell-off of Walmart shares on Monday, and the loss of as much as $9.9 billion in market value for the company (via Emerging Money/NASDAQ). Walmart has responded by detailing its current efforts at ensuring FCPA compliance.

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