Aug 29 (Reuters) - Walmart ( WMT ) defeated an appeal by

shareholders who said the world's largest retailer defrauded

them by failing to disclose that federal prosecutors were

investigating its opioid-dispensing practices.

The 3rd U.S. Circuit Court of Appeals in Philadelphia said

Walmart ( WMT ) did not commit securities fraud by waiting until June

2018 to reveal it was being investigated, 1-1/2 years after the

probe began and 10 weeks after a Texas prosecutor warned she

intended to indict the company.

Walmart ( WMT ) learned of the opioid probe after federal agents

raided one of its stores, seeking records concerning two Texas

doctors who were prescribing vast amounts of the painkillers.

The company was not indicted, but was hit with a U.S.

Department of Justice civil lawsuit in December 2020. A trial is

scheduled for November 2027. The Bentonville, Arkansas-based

retailer has more than 5,000 Walmart ( WMT ) and Sam's Club pharmacies.

Shareholders sued Walmart ( WMT ) after ProPublica reported on the

near-indictment on March 25, 2020.

Walmart ( WMT ) shares fell 5.1% that day, wiping out about $16

billion of market value, and fell after the Justice Department

announced its civil lawsuit.

In Friday's 3-0 decision, Circuit Judge Anthony Scirica said

"not everything is securities fraud," and that while Walmart ( WMT ) did

not reveal the indictment threat it "did what it had to do" to

avoid misleading disclosures.

"The complaint does not plausibly allege the investigations

into Walmart ( WMT ) constituted a liability or a reasonably possible

liability, or that Walmart's ( WMT ) disclosures implied it was not

under investigation," Scirica wrote.

"Once the contours of the investigation were clearer," he

added, "Walmart ( WMT ) disclosed it was under investigation, what it

was under investigation for, and that it faced possible losses."

Friday's decision upheld an April 2024 dismissal by Chief

Judge Colm Connolly of the Delaware federal court.

Lawyers for the shareholders did not immediately respond to

requests for comment. A Walmart ( WMT ) spokeswoman said the company was

pleased with the outcome.

In November 2022, Walmart ( WMT ) reached a $3.1 billion nationwide

settlement of opioid claims by state, local and tribal

governments.

The case is In re Walmart Inc Securities Litigation, 3rd

U.S. Circuit Court of Appeals, No. 24-1818.