Three law firms in the U.S. — Bragar Eagel & Squire, The Rosen Law Firm and Howard G. Smith — have filed class action lawsuits against Infosys.
A class action lawsuit is one in which a group of people with the same or similar injuries caused by the same product or action sue the defendant as a group.
Bragar Eagel & Squire has filed a class action lawsuit in the United States District Court for the Eastern District of New York on behalf of investors that purchased Infosys Limited securities between July 7, 2018 and October 20, 2019.
Investors have time till December 23, 2019, to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The complaint, filed on October 23, 2019, alleges that throughout the class period, defendants made false or misleading statements and failed to disclose that: the company improperly recognised revenues to inflate short-term profits; that the company’s CEO, Salil Parekh, bypassed reviews and approvals for large deals to avoid accounting scrutiny; and the management pressured the company’s finance team to hide information from auditors and the company’s board of directors.
Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. The lawsuit filed byit seeks to recover damages for Infosys’ investors under the federal securities laws.
On October 21, 2019, Infosys disclosed that it had received whistleblower complaints alleging ‘unethical practices’ by the company’s management to inappropriately boost short-term revenue and profit. Moreover, the complaints alleged that Mr. Parekh bypassed reviews and approvals of large contracts to avoid accounting scrutiny, one of the firms said.
Consequentially, the company’s share price fell $1.28, or over 12%, to close at $9.29 per share on October 21, 2019, thereby affecting investors.
