The US-based outsourcing firm iGate has been slapped with class action lawsuit in the US for alleged violations of federal securities laws in view of its sacked chief executive Phaneesh Murthy's "improper relationship" with a subordinate employee.
The suit was filed on behalf of persons/entities who acquired iGate shares between March 14, 2012 and May 21, 2013. The New York-based law firm, Pomerantz Grossman Hufford Dahlstrom & Gross, filed the class action lawsuit against US-based iGate Corporation and some of its officers in the US district court of Northern District of California on June 14. According to the law firm, the complaint has alleged that throughout the class period, defendants (iGate) had made materially false and misleading statements regarding its business, operational and compliance policies. "Specifically, defendants made false and/or misleading statements and/or failed to disclose that" (i) the company's chief executive and president 'Murthy' was involved in an improper relationship with a subordinate employee in violation of iGATE's explicit policies to the contrary.
iGate had sacked Murthy on May 20 for allegedly failing to report a relationship with a subordinate employee. The suit has been filed to recover damages against the firm and some of its officers and directors on account of alleged violations of the federal securities laws pursuant to sections 10(b) and 20(a) of the SEC of the 1934 Act and Rule 10b-5 promulgated thereunder. "The class action, filed in the US district court, Northern District of California, and docketed under CV 13 2737 PSG LHK, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of iGATE between March 14, 2012 and May 21, 2013 both dates inclusive," the law firm said in a statement.
It further said the action seeks to "recover damages against the company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder." An iGate spokesperson said, "we believe that this claim has no merit, and we intend to vigorously
defend this action. No other similar claims have been filed.”
