Three US law firms to investigate alleged 'securities fraud' in Infosys

Tammy Harvey
August 20, 2017

A US law firm, Bronstein, Gewirtz & Grossman, LLC is investigating potential claims on behalf of American shareholders of Infosys on whether the New York Stock Exchange-listed firm and "certain of its officers and/or directors" complied with federal securities laws, according to a statement posted on its website. It said that it is preparing a class action lawsuit to recover investor losses.

Rosen Law Firm claimed that the investigation is "resulting from allegations that Infosys may have issued materially misleading business information to the investing public".

The investigation concerns whether Infosys and certain of its officers and/or directors have complied with federal securities laws.

The fall in the Infosys scrip following the exit of its managing director and CEO Vishal Sikka has wiped out about $3.5 billion (Rs 22,480 crore) in investor wealth on Friday.

The share buyback - which will be the first in the company's 36-year history - has been a long-standing demand by some of the founders and high-profile former executives, who have been pushing Infosys to return surplus capital to its shareholders.

"Sikka reiterated his belief in the great potential of Infosys. but cited among his reasons for leaving a continuous stream of distractions and disruptions over the recent months and quarters, increasingly personal and negative as of late, as preventing management's ability to accelerate the Company's transformation."

On news of Sikka's resignation, Infosys's American Depositary Receipt price has fallen as much as $1.43, or almost 9%, during intraday trading on August 18, 2017.

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