The California State Teachers' Retirement System, which owns 5.3 million shares in the retail giant (considered a smallish stake) accuses the company of breaching its fiduciary duty by not pursuing evidence of massive bribery at a Mexican subsidiary. The possible wrongdoing was laid out in a NYT story last month. This is known as a derivative lawsuit, and it's common for one to be filed after reports of possible impropriety at a publicly held company. CalSTRS is an activist pension fund, especially on matters of corporate governance. It wouldn't be surprising to see other institutional shareholders join the suit, which names all current directors, along with several executives and some former board members. From the NYT:
"Our connection to this stems from ensuring that there is a responsible board of directors representing our interests day in and day out, overseeing compliance, overseeing a code of ethics," said Jack Ehnes, the chief executive of CalSTRS. "We all need to understand what was going on in the boardroom, and what was going on in the corporate culture." The suit is believed to be the first by a big and established institutional investor in the aftermath of the bribery accusations. Earlier, leaders of New York City's pension funds said they would vote their shares against the five directors standing for re-election at the company's shareholder meeting in June.