Millennium Post

Phaneesh Murthy affair: iGate slapped with class action suit

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 CEO Phaneesh Murthy's 'improper relationship' with a subordinate employee. The suit has been filed on behalf of persons or entities who purchased or acquired securities of iGate between 14 March, 2012 and 21 May, 2013.

The New York-Based law firm, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, 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 14 June.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 the company's Chief Executive Officer and President 'Murthy' was involved in an improper relationship with a subordinate employee in violation of iGATE's explicit policies to the contrary.'

'Murthy's improper conduct created a risk that he would be terminated from the company, jeopardising the company's future success.'

iGate had sacked Murthy on 20 May 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 Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
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