Costco Beats Investor Lawsuit in Spat Over Internal Controls

Costco Wholesale Corp. won’t have to face a would-be class suit accusing it of misleading investors about its internal controls, after a Washington federal district judge dismissed the case.

The membership-only warehouse chain’s investors sufficiently alleged that some of Costco’s statements on its internal controls were false and misleading, but they failed to establish that the company acted intentionally or was deliberately reckless, the U.S. District Court for the Western District of Washington said Nov. 26.

Costco told investors it had sufficient internal controls to prevent unauthorized users from changing the information it used for financial reporting.

The company later ...