Cognizant faces another law suit from US law firm

Law firm Holzer & Holzer LLC -- representing the investors -- alleged that the IT major made "improper payments to obtain permits and building licences in India".

Cognizant is facing yet another class action lawsuit in the US from a section of investors. Photo: Pixabay

Cognizant is facing yet another class action lawsuit in the US from a section of investors for allegedly issuing "false and misleading statements about its business and operations" between February and September this year.

Law firm Holzer & Holzer LLC -- representing the investors -- alleged that the IT major made "improper payments to obtain permits and building licences in India".

Cognizant, which had a headcount of over 2.44 lakh at the end of June, has a majority of these employees based in India. The company is slated to announce its third-quarter results on November 7.

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In a statement, the Atlanta, Georgia-based law firm said that the class action lawsuit has been filed on behalf of the investors in Cognizant.

"The complaint alleges Cognizant issued false and misleading statements about its business and operations between February 25, 2016 and September 30, 2016," it said.

On September 30, 2016, Cognizant had said it was conducting an internal investigation into possible violations of the US Foreign Corrupt Practices Act, following which the price of Cognizant's stock tanked, hurting shareholders.

Additionally, Cognizant had announced the resignation of the company's President, Gordon Coburn.

Holzer & Holzer invited investors to join the class action lawsuit, in case they "purchased Cognizant shares during that time and suffered a loss" on the investment.

When contacted, Cognizant declined to comment on the matter.

Holzer & Holzer said the deadline to ask the court to be appointed lead plaintiff is December 5, 2016.

Last month, Glancy Prongay & Murray LLP had also announced an investigation on behalf of the Cognizant investors concerning the company's and its officers' possible violations of federal securities laws.

Glancy Prongay & Murray LLP had invited the investors to join its lawsuit, which seeks to "file an action under the federal securities laws to recover damages and seek other relief against Cognizant".

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