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Whistleblower: Walmart cut corners for market share and fired me

A former Walmart business development director has filed a federal lawsuit against the retail giant. He claims that Walmart betrayed founder Sam Walton's principles of honesty and integrity -- and may have violated the law -- by pushing for "meteoric growth" in their e-commerce business. When the executive pointed out the wrongdoing, he says, he was fired.

A spokesperson for Walmart claimed the allegations were merely the statements of a disgruntled former employee. The spokesperson said the business development director had been let go during a business restructuring. He also said the company had investigated the former executive's complaint at the time and found no suggestion of impropriety.

The former executive says that Walmart, "desperate to gain the ground it had long lost to Amazon," engaged in a range of wrongdoing, however. For example, products were mislabeled so that the company could charge excessive sales commissions. Failure to process consumer returns properly resulted in a false boost to its e-commerce results.

After the retailer spent billions of dollars in recent years to compete with Amazon, Walmart reported that its quarterly online sales for the 2016 quarter including the December holiday period had risen by 23 percent.

The former executive says that rapid growth was the result of cheating, corner-cutting and overstated revenue. For example, he says that Walmart charged shockingly high commissions from third-party sellers on its online platform. Those commissions were around 15 percent, as opposed to 6 or 8 percent, which is customary.

In another example, the former executive says that Walmart's failure to process $7 million worth of customer returns inflated its sales numbers for the quarter that ran from September 2015 to March 2016.

The former executive says he raised his concerns with Walmart's U.S. e-commerce chief. He was then abruptly fired in retaliation, he says. Walmart's claim that it let him go during a workforce reduction and in response to performance issues is a pretext, he claims.

In the lawsuit, the former executive claims that his termination violated the whistleblower protections of the Sarbanes-Oxley Act and other laws. He seeks compensatory and punitive damages for wrongful termination.

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