Business

More Trouble For Infosys As US Law Firms Consider Suit To Recover Investors' Losses

न्यूज़ वर्ल्ड इंडिया | 0
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| August 20 , 2017 , 12:19 IST

Barely days after the sudden resignation of Infosys MD and CEO Vishal Sikka and a steep drop in share prices, the company may be faced with more trouble yet. So far 4 US law firms are considering filing claims on the behalf of Infosys investors regarding alleged securities fraud committed by officers and directors of the company.

The law firms of Rosen Law Firm, Goldberg Law, Pomerantz, and Bronstein, Gewirtz & Grossman are investigating claims on behalf of investors after allegations were made that Infosys may have issued misleading information to the investing public. The firms are reportedly preparing a class action lawsuit which is filed on behalf of a group, however, it is not yet confirmed whether a sufficient amount of shareholders will step forward for the class action suit.

ALSO READ: Infosys Stocks Plummet After CEO And MD Vishal Sikka Resigns

Similar to a public interest litigation filed in India, a class action lawsuit in the US is where a group of people are represented by a member of the group and the plaintiff sues the defendant or multiple defendants on behalf of the group.

The law firms have raised concerns regarding the sharp fall in share prices following the resignation of Sikka which led to an erosion of investors wealth. According to Goldberg Law, which specialises in securities class-action lawsuits and shareholder rights litigation, the probe would focus on whether Infosys and some of its officers and or directors violated federal securities laws.

Other Indian companies have been targeted by US class action lawsuits in the past, including TCS for breaching employment contracts, Cognizant for misleading statements about its operations, Sun Pharma (for closure of its US arm and for raising prices) and Welspun India (for violating Missouri's consumer fraud statutes).