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Securities Law

Costco Again Beats Investor Suit Claiming Poor Internal Controls

Aug. 20, 2020, 4:17 PM

Costco Wholesale Corp. investors lost their bid to hold the company liable for alleged internal control failures after a federal judge in Washington again dismissed their would-be class complaint, this time with prejudice.

Investors accused the members-only wholesaler of misleading them about having sufficient internal controls to prevent unauthorized users from changing financial reporting information, but they again failed to properly allege that Costco acted with the requisite intent, the U.S. District Court for the Western District of Washington said Wednesday.

The court ruled in 2019 that the investors had sufficiently alleged that some of Costco’s statements were misleading, but...

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