What did Wal-Mart Stores Inc. (NYSE: WMT) know about allegations of bribery in Mexico, and when did they know it? The retail giant will have to answer those questions in court following a ruling by an Arkansas federal judge.

The case involves a Michigan-based pension fund that is suing the company, claiming that Walmart defrauded investors by hiding the information it had related to alleged bribes paid in Mexico, China, India and Brazil. According to a report from Bloomberg, both U.S. and Mexican prosecutors are investigating charges that some executives of Walmart’s Mexican division were bribing officials in order to speed up the construction of new stores and warehouses.

The New York Times reported in 2012:

The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.

A company spokesperson told Bloomberg, “We are disappointed in the court’s ruling,” but the pension fund is now on the hook to “come forward with actual evidence to prove its case, and we don’t believe it will be able to do so.”

The current suit turns on what Walmart executives knew or should have known, and when they knew it. The pension fund alleges that former Walmart CEO Michael Duke and other company board members knew of the bribery allegations in 2005 and did not conduct a thorough investigation. The judge ruled that the pension fund raised a legitimate question about whether Walmart “omitted a material fact” in an SEC statement that then led investors to believe that the company only learned about the allegations six years later.

Walmart’s Mexican subsidiary, Wal-Mart de Mexico, employees more than 200,000 people and is the country’s largest private employer.

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