Infosys Slapped With Class Action Lawsuit For Misleading Investors With False Revenue Numbers
Infosys has been the talk of the town, especially after this whole new allegation put on it. As it appears, a shareholder rights litigation firm based in Los Angeles has filed a class action lawsuit against the Bangalore based Indian IT major.
This class action lawsuit accuses Infosys to have violated 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the US Securities and Exchange Commission. Let’s learn more about what the firm believes Infosys has done wrong.
US Rights Firm Files Lawsuit on Infosys
About some time back, we informed you that Infosys has inaugurated a new technology centre in Arizona and is actively is looking out to hire about 1,000 American techies over four years to work at the centre in the south-western state for local enterprises.
This clearly speaks for the strong command the Indian IT firm holds in the US market, so much that it is working towards accelerating innovation for its American enterprises.
Among all of this, it has come to our attention that a shareholder rights litigation firm based in Los Angeles, the Schall Law Firm has filed a class action lawsuit against Infosys Limited. According to this complaint, Infosys made false and misleading statements to the market and used improper recognition of revenue to boost short-term profits.
Class Action Law Suit Against Infosys: The Reason
The Schall Law Firm represents investors around the world and specializes in securities class action lawsuits and shareholder rights litigation.
Some months back, a whistleblower complained against Infosys and its CEO Salil Parekh on the similar lines. However, after the investigation, there wasn’t any such evidence found against Infosys.
Speaking of the present complaint filed by Schall Law Firm, Infosys’ CEO skipped standard reviews of large deals to avoid accounting scrutiny. They also went on to add that the company’s finance team was pressured to hide details of these deals and other such 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.
Schall said it encourages investors with losses in excess of $100,000 to contact the firm. Investors who purchased the company’s securities between July 7, 2018 and October 20, 2019 have been asked to contact the firm before December 23, 2019.