A US-based shareholder rights litigation firm announces the filing of a class-action lawsuit against Infosys, accusing the Indian IT major of marking false and misleading statements to investors.

The Schall Law Firm said investors who purchased Infosys securities between July 7, 2018, and October 20, 2019, could participate in the action by December 23.

The lawsuit came after the company disclosed in late October an unnamed group sent letters to Infosys’ board and the US Securities and Exchange Commission alleging that the company had taken “unethical” steps to inappropriately boost short-term revenue and profit.

The letter alleged that CEO Salil Parekh was bypassing standard reviews of large contracts in order to skirt accounting scrutiny.

The Schall Law Firm accused Infosys of violating 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the US Securities and Exchange Commission, it said in a news release.

The complaint alleged that Infosys used improper recognition of revenue to boost short-term profits and that CEO Salil Parekh skipped standard reviews of large deals to avoid accounting scrutiny.

"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," said the law firm in the news release.

First Published:Dec 12, 2019 11:39 AM IST