Walmart sued by former exec alleging unlawful conduct in e-commerce business pinned against Amazon

Walmart shares fell more than 1 percent Thursday after a former executive filed a lawsuit with a federal court in San Francisco, alleging the retailer issued misleading e-commerce results.

Tri Huynh, a former director of business development at Walmart, having also worked at Amazon, says he was terminated by the company under false pretenses in 2017. He said he tried to raise concerns of Walmart's "overly aggressive push to show meteoric growth in its e-commerce business by any means possible — even, illegitimate ones."

Bloomberg first reported on the news.

Representatives from Walmart didn't immediately respond to CNBC's request for comment.

Huynh has accused Walmart of acting in ways that were "violations of the law" in a race to keep up with Amazon, prompting him to speak out.

He says the company mislabeled items on its website so that third-party vendors were paid lower commissions, it sent customers the wrong orders, and forced merchants to deal with greater returns. Walmart also overlooked basic internal controls, according to the lawsuit, which was reviewed by CNBC.

Walmart's e-commerce growth has skyrocketed ever since the company acquired Jet.com a little more than a year ago. In the first quarter of fiscal 2018, the company's online sales jumped more than 60 percent. In the most recent quarter, though, e-commerce sales were only up about 23 percent, igniting fears that investments had cooled.

Huynh claims he saw "more and more troubling information" at Walmart following the Jet acquisition.

"A high percentage of the product sale lists between Jet.com and Walmart.com overlapped – that is, they contained redundant SKUs," the lawsuit says. "Yet Wal-Mart was reporting the redundant SKU numbers as if they were separate, non-redundant, thereby misrepresenting and artificially and falsely inflating SKU growth numbers."

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