Post Sikka exit, 3 US law firms launch probes into Infosys
19 Aug 2017
Following the acrimonious exit of Vishal Sikka as managing director and chief executive of Infosys on Friday, three US legal firms have launched investigations into whether the company or its officers/ directors are engaged in securities fraud or other unlawful business practices.
The law firms are Bronstein, Gewirtz & Grossman, Pomerantz Law Firm, and Rosen Law Firm. Rosen is also preparing a class action lawsuit to recover losses suffered by Infosys investors, reports in The Times of India group publications said.
In an official statement, Bronstein, Gewirtz & Grossman, LLC said that they are investigating potential claims on behalf of purchasers of Infosys Limited. The investigation concerns whether Infosys and certain of its officers and/or directors have complied with federal securities laws.
''On August 18, 2017, Infosys announced the resignation of its Chief Executive Officer, Vishal Sikka. Sikka's resignation followed criticism by the Company's founders of certain decisions by its board, including executive compensation and severance payouts,'' the statement said.
Sikka resigned as CEO and managing director of Infosys blaming "unrelenting" and "malicious" attacks, for which its board blamed founder N R Narayana Murthy. (See: Vishal Sikka quits as Infosys CEO; U B Pravin Rao takes over )
After news of Sikka's resignation, Infosys American Depositary Receipts has dropped as much as $1.43 per share, or nearly 9 per cent, during intraday trading on Friday.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique known for aggressive pursuit of litigation claims on behalf of their clients.
Rosen Law Firm has announced an investigation of potential securities claims on behalf of shareholders of Infosys Ltd resulting from allegations that Infosys may have issued materially misleading business information to the investing public.
As per the statement released by the company, Sikka's resignation comes amid criticism by Infosys' founders of decisions by Infosys' board, including executive compensation and severance payouts.
Representing investors across the globe since 2014, Rosen Law Firm has been ranked 2 in the nation by Institutional Shareholder Services for the number of securities class action settlements annually obtained for investors.
Over concerns of securities fraud or other unlawful business practices by officers or directors, Pomerantz Law Firm is also starting an investigation against the company.
With offices in New York, Paris, Chicago, and Los Angeles, the Pomerantz Firm is one of the premier firms in the areas of corporate, securities, and antitrust class litigation.
Sikka has been appointed as the executive vice-chairman of Infosys for now and will likely hold the new post till the new permanent CEO and MD take charge, which is expected to happen by 31 March next year. He will receive an annual salary of $1 during his tenure as executive vice-chairman and will continue to focus on strategic initiatives, key customer relationships and technology development.
The open spat led to Infosys stock plunging 10 per cent.