Walmart Director Jim Breyer Linked to Growing List of Scandals, Including Facebook’s Bungled IPO

There’s no doubt that Jim Breyer, the billionaire venture capitalist who sits on the boards of Facebook and Walmart, is very rich and very smart. Good for him.

But, an article in Sunday’s New York Times questions Breyer’s effectiveness as a board member at Facebook, Dell, Walmart and other companies.

The Times puts it this way: “As an investor and venture capitalist, Mr. Breyer is a star……. But as a director, his star quickly fades.”

In the wake of Walmart’s alleged bribery scandal in Mexico, the investor advisory firm PIRC and two massive California pension funds, CalPERS and CalSTRS, have taken the dramatic step of opposing Breyer’s re-election to the Walmart board of directors when the company’s shareholders meet on June 1st.

CalPERS argues that the investigation into bribery allegations in Mexico “should not be overseen by current members of the board that served in either a board oversight or senior management capacity at the time of the alleged bribery.” This includes Breyer, who has been on Walmart’s board since 2001.

The Walmart Mexico scandal and Facebook’s bungled IPO raise a fundamental question about Breyer’s conduct as a director of publicly held companies: Can he be trusted to put the interests of Main Street investors ahead of wealthy insiders like himself?

It will be a while before the dust settles on the Facebook IPO, but the facts being reported so far paint a rather unseemly picture.

First, right before the IPO, negative information about Facebook’s revenues was selectively disclosed to big investors but not to the general public.

Second, at the last minute before the IPO Breyer (along with other Facebook insiders and major institutional investors) decided to significantly up the number of shares he would sell to the public.

Third, retail investors who bought into Facebook at the price set by the company’s underwriters got burned when the stock plummeted shortly after trading opened.

Given all the red flags raised by this chain of events, the public has a right to know what Breyer and other insiders knew and when they knew it. With all the lawsuits and investigations now under way we’re looking forward to full disclosure of the pertinent facts.

In the meantime, Walmart shareholders have an opportunity to express their concerns at the June 1st meeting.

Written by Marc Auerbach