InvestorQ : How will the Infosys stock be impacted by the class action suit filed against the company by a US law firm? Do you see price damage on the stock?
Khushi Patel made post

How will the Infosys stock be impacted by the class action suit filed against the company by a US law firm? Do you see price damage on the stock?

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Arya Nanda answered.
3 years ago
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The class action suit is being filed in response to the whistleblower complaint against the CEO and the CFO of Infosys regarding mis-stating the accounts of the firm. US-based Schall Law Firm, a shareholder rights litigation firm, announced the filing of a class action lawsuit against Infosys Limited. It alleges that Infosys made false and misleading statements to the market and used improper recognition of revenue to boost short-term profits. Earlier, when the whistleblower had written to SEBI and to SEC, Infosys had conducted an internal investigation but found nothing out of order and had stated that they could not find any evidence.

Schall alleges that the CEO, Parekh, skipped standard reviews of large deals to avoid accounting scrutiny. The class action suit also adds that Infosys finance team was pressured to hide details of these deals and other accounting matters from auditors and the Board of Directors of Infosys. The law firm has stated that the company made public statements based on incorrect analysis of financials and hence they were misleading and had resulted in losses for the investors. In fact, Schall has asked investors with losses in excess of $100,000 to contact them directly.

The Schall Law Firm represents investors around the world and specializes in securities class action lawsuits and shareholder rights litigation. Class action suits are fairly large in the US and the penalties can be quite steep if it is durably proved that the actions or absence of due diligence actually led to huge losses to the investors at large.

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