Case Name: Cognizant Technology Solutions
Class Period: 2/27/2015 -- 09/29/2016
Settlement Fund: $90,000,000
Claim Filing Deadline: 1/28/2022
Investors are receiving notices this week in the Cognizant Technology Solutions securities litigation. The team at CCC is already reviewing trade data and preparing claims in this case for hundreds of our clients and tens of thousands of their clients. If you want the burden of filing claims in this settlement, and in any of the other 35+ upcoming securities class action settlements, give us a call today at 312-204-6970.
What this case is about
On September 30, 2016 Cognizant Technology Solutions announced that it was conducting an internal investigation into whether certain payments it had made to companies in India violated the U.S. Foreign Corrupt Practices Act. Shortly after the announcement, according to the plaintiff’s Second Amended Complaint, “The Company’s stock price fell more than 13%, or $7.29 per share, from $55.00 to $47.71 on the year’s highest trading volume by far (over 53 million shares). This one-day decline, by itself, eradicated $4.4 billion in shareholder value.”
But the trouble was only getting started.
Cognizant’s former president, Gordon Coburn, and its chief legal counsel, Steven Schwartz, were eventually indicted for participating in a bribery scheme, wherein they allegedly paid one or more Indian officials $2 million in order to create an office park, and concealed the transaction via a payment to a third-party construction contractor. The company itself eventually paid a $25 million fine to settle charges filed by the Securities and Exchange Commission.
Both Coburn and Schwarz vehemently deny any wrongdoing. In June, the Wall Street Journal reported that that the fight between the two officers and their former company had become bitter. Coburn and Schwartz claimed Cognizant had undermined their defense and that the government was relying too much on the company’s version of events—one they alleged to be shoddy. They further claimed that Cognizant had spied on them through a kind of mole on Schwartz’s own legal team. Cognizant, for its part, has sued a member of Schwartz defense team, alleging he overcharged the company for its services (which the company was obliged to pay). Their trial is set for March 22, 2022.
Per usual, in the settlement notice in the securities case, the defendants deny any wrongdoing, despite the $25 million SEC settlement. In fact, that case was settled without admitting or denying the company’s role in any bribery. Victory has a thousand fathers, but a bribery scheme, like failure, turns out to be an orphan as well.