InvestorQ : How do you think the dismissal of the class action suit against Infosys is likely to change the investor perception of the stock?
Mahima Roy made post

How do you think the dismissal of the class action suit against Infosys is likely to change the investor perception of the stock?

Answer
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Aditi Sharma answered.
5 months ago


Infosys has confirmed that the class action lawsuit filed against the company and some of its key employees in the United States District Court had been dismissed by the court. The suit, representing a set of shareholders of Infosys, had alleged violation of the US federal securities laws. The suit had also specifically named the Infosys CEO and CFO for dereliction of duty and for misleading the investors. However, on Wednesday May 21, the plaintiff voluntarily dismissed the lawsuit without prejudice. The complaint had originally alleged that Infosys had made false and misleading statements to the market and used improper recognition of revenue to boost short-term profits. It had even alleged that CEO Salil Parekh skipped standard reviews of large deals to avoid accounting scrutiny. It had also insinuated that the company's finance team was pressured to hide details of these deals and other accounting matters from auditors and the Board of Directors. This is likely to keep the stock strong in a volatile market.