Wal-Mart’s stock fell almost 5 percent on Monday, accounting for about one-fifth of the losses in the Dow Jones industrial average, as investors reacted to a bribery scandal at the retailer’s Mexican subsidiary and a report that an internal investigation was quashed at corporate headquarters in Arkansas.


The New York Times reported on Sunday that Wal-Mart investigators had found credible evidence that the subsidiary, Wal-Mart de Mexico, had paid millions of dollars in bribes to support expansion in Mexico, where the retailer has one in five of its stores. Told of this evidence in 2005, top executives in Bentonville, Ark., shut down the investigation, The Times reported.


On Monday, politicians from Washington to Mexico City called for outside investigations into Wal-Mart’s conduct.


The fallout for Wal-Mart could be significant. A settlement of any sort would very likely include large fines by both the Justice Department and the Securities and Exchange Commission, said Matthew J. Feeley, who works on cases involving the Foreign Corrupt Practices Act at the law firm Buchanan Ingersoll & Rooney. Any executive found guilty of a crime, moreover, could face jail time, Mr. Feeley said.


Several former and current Wal-Mart executives in Mexico and in the United States were implicated in the bribery accusations or were involved in the subsequent decision not to alert law enforcement authorities.


“I think there’s going to be a lot of pressure to come down hard on them as a company, not entirely because of the actual violations but because of the failure to do anything internally when those violations came to light,” Mr. Feeley said.


The uncertainty made investors anxious on Monday. Wal-Mart’s stock lost $2.91 in heavy trading, to $59.54. Wal-Mart de Mexico’s stock, traded separately, fell more than 12 percent to 37.89 pesos.


A Wal-Mart spokesman, David Tovar, said in a statement that the audit committee of Wal-Mart’s board had been overseeing an investigation of Wal-Mart’s compliance with the Foreign Corrupt Practices Act since the fall, and that outside legal counsel and forensic accountants were reporting regularly to the audit committee about findings.


Wal-Mart hired the law firm Jones Day to look into the bribery questions. It also hired the law firm Greenberg Traurig to conduct a worldwide review of the company’s compliance with F.C.P.A., as well as KPMG to handle forensic accounting.


In Washington, two Democratic representatives, Elijah E. Cummings, of Maryland, and Henry A. Waxman, of California, said they had requested a meeting with company officials and were contacting other people who might have knowledge of the bribery allegations.


Critics of Wal-Mart in New York, including some elected officials, union leaders and small-business groups, said the company’s actions in Mexico cemented their opposition to Wal-Mart’s opening a store in the city.


“This is precisely the type of business we do not want in our communities and I remain committed to fighting against Wal-Mart’s corporate poison from entering the five boroughs,” Christine C. Quinn, the City Council speaker, said in a statement. Bill de Blasio, the city’s public advocate, and the Manhattan borough president, Scott M. Stringer, also issued statements criticizing Wal-Mart.


Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, asked Wal-Mart to detail all the spending it has done and donations it has made with regard to opening a store in New York.


Wal-Mart’s current chief executive, Michael T. Duke, was told about the allegations regarding bribery in Mexico in 2005, when he was given responsibility for all foreign subsidiaries, The Times reported. The internal investigation was ended after the chief executive at the time, H. Lee Scott Jr., now a Wal-Mart board member, rebuked internal investigators for being overly aggressive, the article on Sunday said.


Eduardo Castro-Wright, the former head of Wal-Mart’s United States operations who was promoted to vice chairman in 2008, was identified by a former company lawyer in Mexico as the driving force behind years of bribery when he was in charge of Wal-Mart de Mexico.


Mr. Tovar declined to comment on whether the board was considering actions against the executives.