According to the law firm press release, iGATE offers a range of information technology ("IT") solutions to large and medium-sized organizations using an offshore/onsite model. The Company's services include client/server design and development, conversion/migration services, offshore outsourcing, enterprise resource planning package implementation and integration services, and software development.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company's Chief Executive Officer and President was involved in an improper relationship with a subordinate employee in violation of iGATE's explicit
policies to the contrary; and (ii) the CEO's improper conduct created a risk that he would be terminated from the
Company, jeopardizing the Company's future success.
On May 20, 2013, the Company disclosed that its Board of Directors terminated the employment of the President and CEO, effective immediately, after an internal investigation revealed that the CEO had a relationship "with a subordinate employee and a claim of sexual harassment" in violation of iGATE's company policies and the employment contract. On this news, iGATE securities declined $1.58 per share or nearly 10%, to close at
$14.82 per share on May 21, 2013.
On May 22, 2013, the Company further revealed that the termination of the CEO was "'for cause,' and thus not entitled to severance payment under the terms of his Employment Agreement with the Company." In response to
his termination, the Defendant acknowledged that he had a personal relationship with a Company employee, which
was against company policy stating, "[i]t was a personal relationship. The company policy states that any two employees having a relationship have to inform the superiors." On this news, iGATE securities declined an additional $0.64 per share or more than 4%, to close at $14.18 per share on May 22, 2013.
On August 22, 2013, the plaintiff and their counsel voluntarily dismissed this action without prejudice against all of the defendants, Pursuant to F.R.C.P. 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure.