India’s second largest software services exporter Infosys received a relief in ongoing legal battle in the US.
A class action suit that alleged violation of the US federal securities laws by Infosys was dismissed on Thursday.
The lawsuit was filed against Bengaluru-headquartered company and its current/former officials in October 2019, in the United States District Court.
The complaint, which was filed in the Eastern District of New York, was brought on behalf of a class consisting of persons or entities who purchased the Company’s publicly traded securities between July 7, 2018 and October 20, 2019.
The suit alleged claims for violations of the US federal securities laws. On May 21, 2020, the plaintiff voluntarily dismissed the lawsuit without prejudice.
Rosen Legal was the first to file its class action against Infosys, even though at least three other firms have put out notices stating that they are looking at filing securities class action suits after whistleblowers alleged the company’s top executives using aggressive accounting tactics and hiding information from auditors in an attempt to boost revenue and profit.
The whistleblowers accused CEO Salil Parekh and CFO Nilanjan Roy for accounting irregularities and “unethical practices” to boost growth numbers.
In March, Infosys got a clean chit from the Securities and Exchange Commission (SEC) in the whistleblower complaint case.
Infosys released a detailed report on the outcome of its audit committee investigation on a whistleblower complaint in January, which gave clean chit to Infosys. The investigation was done with the assistance of independent legal counsel Shardul Amarchand Mangaldas & Co and PricewaterhouseCoopers.
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