Cognizant Discloses Internal Investigation, Says Indian Plant May Have Violated FCPA

Cognizant Technology Solutions Corp CTSH shares are trading more than ten percent down following the two significant announcements. The first one related to the management change and the second related to any possible Violation of Foreign Corrupt Practices Act.

First, Cognizant revealed the naming of Rajeev Mehta as president citing that Gordon Coburn has resigned from the position. Its press statement did not talk anything about the investigations. However, six minutes later, the company filed Form 8-K with the SEC where it spilled the beans.

In the "other events" column of the filing, the company disclosed that it is carrying out an investigation on whether any payments in respect of Indian facilities were made improperly. The company believes if any such payments happened, then it would invite FCPA in the United States.

Related Link: Needham Analyst Covering Cognizant Has Told Benzinga He Has Not Issued Research On Stock This A.M.

Cognizant indicated that its audit committee is conducting the investigation with a focus on a small number of company-owned facilities.

"The internal investigation is in its early stages, and the Company is not able to predict what, if any, action may be taken by the DOJ, SEC or any governmental authority in connection with the investigation or the effect of the matter on the Company's results of operations, cash flows or financial position," the filing indicated.

At time of publication, Cognizant had sunk 16.05 percent to $46.17.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsLegalManagementTechGeneralFCPAForeign Corrupt Practices ActGordon CoburnIndiaPajeev Mehta
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!