BENGALURU: A US Court has dismissed the class action lawsuit which was filed by Schall Law Firm on behalf of entities/ persons who purchased the Company’s publicly traded securities between July 7, 2018 and October 20, 2019.
"The complaint which was filed in the Eastern District of New York was dismissed by the plaintiff on May 21 without any prejudice," Infosys informed exchanges in a filing.
The lawsuit had alleged that the Infosys violated US federal securities laws.
The complaint was filed after two whistleblower letters accused Infosys CEO of indulging in accounting malpractices to show huge profits.
The law firm accused Infosys of violating the 10 (b), 20 (a) Sections of Securities Exchange Act of 1934 and Rule 10 b-5 promulgated there under by the US Securities and Exchange Commission.
The US-based law firm has asked all investors who purchased the company's securities between July 7, 2018 and October 20, 2019 and faced losses over $100,000 to contact them before December 23, 2019. Infosys has also been accused of making improper recognition of revenue to boost short-term profits.
"CEO Salil Parekh skipped standard reviews of large deals to avoid accounting scrutiny. In fact, the company's finance team was pressured to hide details of these deals and other accounting matters from auditors and the company's board of directors. Based on these facts, the company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Infosys, investors suffered damages," the law firm said in a statement.
In March, Infosys said that the probe by the USCEC into the whistleblower allegations is over and that the tech firm does not anticipate any further action by the regulator. This was after an audit committee set up by Infosys said that it did not find any merit into the accusations.