Cognizant Technology Solutions Corp has entered into a $95 million settlement to settle a lawsuit accusing the information technology services company of defrauding shareholders by concealing bribes to executives in India.
The proposed class action preliminary settlement was filed Tuesday with federal court in Newark, New Jersey, and requires a judge’s approval.
Shareholders accused Cognizant of failing to disclose payments it had made to obtain permits for facilities in “special economic zones”, including its Indian headquarters in Chennai, where it could enjoy tax and other benefits.
Cognizant’s share price fell 13.3 percent on September 30, 2016, when Teaneck, a New Jersey-based company, said it was investigating allegations of bribery, and whether there were violations of the federal Foreign Corrupt Practices Act.
Defendants, including former President Gordon Coburn and former chief legal officer Steven Schwartz, denied wrongdoing in agreeing to a settlement. Cognizant said it expects insurance companies to cover the bulk of the settlement payments.
In February 2019, Cognizant agreed to pay $25 million to settle a related US Securities and Exchange Commission civil investigation.
US prosecutors also charged Coburn and Schwartz that month with FCPA and other violations. Those criminal cases are pending.
Lawyers for Coburn and Schwartz did not immediately respond to requests for comment on Wednesday.
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