January 8 2009 - New York court filed a class action law suit against Satyam against the Indian software services firm, for not sticking to federal securities laws by issuing materially false and misleading statements It states that the firm has violated section 10(b), 20(a) of Securities act.
Vianale & Vianale LLP and Izard Noble LLP have filed suits on behalf of those who purchased the American Depository Receipts (”ADRs”) of Satyam Computer Services Ltd. (NYSE: SAY) (”Satyam” or the “Company”) between January 6, 2004 and January 6, 2009, inclusive (the “Class Period”.. Izard has filed a lawsuit in the United States District Court for the Southern District of New York, while Vianale’s suit is pending in the Manhattan federal court.
As B.Ramalinga Raju the chairman of Satyam resigned after revealing some financial irregularities in the company and saying his last-ditch labor to fill the “fictitious assets with real ones” through Maytas acquisition failed.Trading in Satyam’s ADRs was suspended before the opening of U.S. trade on Wednesday.
Investors fled from Satyam Computer Services in December as the company planned to acquire two property companies part-owned by its founders; the deals were a last attempt to plug a hole in the firm’s finances, inflated for years by Chairman Ramalinga Raju.
Governance watchers aren’t positive that the latest level of scrutiny will endure, but legal changes would help. Raju further said he or the company’s MD did not take “even one rupee/dollar from the company and have not benefited in financial terms on account of the inflated results.”
Though the various law firm will file complaints seeking class action status but only one of it will be chosen by court to represent aggrieved class of people.
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