Oh no. Not Wallace. Wallace means he's in deep shit. Shit that he didn't even know existed until just now. So he's mostly just staring with an absolutely horrified look on his face, mouth hanging open stupidly, before he gulps and answers quite bravely:

"No, sir, I was hoping you would tell me. Since it seems Midori isn't allowed to tell me herself anymore," he adds as a defiant afterthought, which probably wasn't the best idea considering the circumstance. But Wally's mouth is unstoppable and what's said is said.