4th ; i c•shareholdersfoundation.com/system/files/complaints/... · internal investigation...

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Plaint if f , :;•

V.

!GATE CORPORATION, PHANEESH ;

MURTHY

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UNITED STATES DIST RICT CO URTNO RTHERN DIST RICT OF CAL IF O RNIA

and On Behalf of Al l Others Similar lySituated,

Defendants.

O R I G K A IF E . : 0JUN 1 4 2013

1-6CHA

CLERK, U.S. DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIP

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4Th; I c•

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: C L A SS ACT IO N

COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS

CO MPL AINT FOR VIO L AT IO NOF T HE F EDERALSECURIT IES LAWS

DEMAND FOR JURY T RIAL

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Plaintiff "Plaintiff"), individually and on behalf of all other persons

similarly situated, by his undersigned attorneys, for his complaint against defendants, alleges

the following based upon personal knowledge as to himself and his own acts, and information

and belief as to all other matters, based upon, inter alia, the investigation conducted by and

through his attorneys, which included, among other things, a review of the defendants' public

documents, conference calls and announcements made by defendants, United States Securities

and Exchange Commission ("SEC") filings, wire and press releases published by and regarding

iGATE Corporation ("iGATE" or the "Company"), analysts' reports and advisories about the

Company, and information readily obtainable on the Internet. Plaintiff believes that substantial

evidentiary support will exist for the allegations set forth herein after a reasonable opportunity

for discovery.

NATURE OF THE ACTION

1. T h i s is a federal securities class action on behalf of a class consisting of all

persons other than defendants who purchased or otherwise acquired iGATE securities between

March 14, 2012 and May 21, 2013, both dates inclusive (the "Class Period"), seeking to

recover damages caused by defendants' violations of the federal securities laws and to pursue

remedies under §§ 10(b), 14(a) and 20(a) o f the Securities Exchange Ac t o f 1934 (the

"Exchange Act") and Rules 10b-5 and 14a-9 promulgated thereunder against the Company and

certain of its top officials and/or directors.

2. i G A T E 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,

COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS- 1 -

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enterprise resource planning package implementation and integration services, and software

development.

3. T h e Company claims to have revolutionized the IT and outsourcing market by

offering an outcome-based pricing model to customers as opposed to the industry's traditional

hours-based billing model, a strategy created and implemented by Defendant Murthy. Indeed,

Defendant Murthy was critical to the success and future of iGate. Sinc e joining the Company

in 2003, first as CEO of iGate Global Solutions (iGate's offshore services subsidiary), and then

in 2008, in his role as CEO, Defendant Murthy lead the Company's advances into new markets,

and helped capture new customers and create new revenue sources which were previously

considered unattainable I n sum, the Company's future prospects were particularly dependent

on Defendant Murthy's skills, connections, and strategic planning.

4. D e f e n d a n t Murthy, however, came to iGate with a checkered past. I n his

previous role as an executive at the IT company, Infosys Ltd. ("Infosys"), Murthy was asked to

leave after being accused by two subordinates of sexual harassment.

5. I n order to protect itself from the shenanigans which landed Murthy in trouble at

Infosys, the Company established various codes o f conduct, some o f which were publicly

posted on its website, to combat sexual harassment as well as promote a professional work

environment. One such policy required employees to report any relationships with subordinate

employees. I n addition, the Company's policy stated that, "the organization will tolerate no

form of harassment. j a n d l sexual harassment deserves a special mention here. Unwelcome

sexual advances, request for sexual favours, and other physical, verbal, or visual conduct based

on sex, constitute sexual harassment. • [n]o supervisor is to threaten or suggest, either


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explicitly or implicitly, that an employee's refusal or willingness to submit to sexual advances

will affect the employee's terms or conditions of employment."

6. T h r o u g h o u t the Class Period, Defendants made materially false and misleading

statements regarding t he Company's business, operational and compliance polic ies.

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 o f iGATE's explic it policies to the

contrary; and (ii) Murthy's improper conduct created a risk that he would be terminated from

the Company, jeopardizing the Company's future success.

7. O n May 20, 2013, the Company disclosed that its Board of Directors terminated

the employment o f President and CEO Phaneesh Murthy, effective immediately, after an

internal investigation revealed that Murthy had a relationship "with a subordinate employee and

a c laim o f sexual harassment" in v iolation o f iGATE's company policies and Murthy's

employment contract.

8. O n this news, iGATE securities declined $1.58 per share or nearly 10%, to close

at $14.82 per share on May 21, 2013.

9. O n May 22, 2013, the Company further revealed that the termination of the

CEO was " for cause,' and Mr. Murthy is not entitled to severance payment under the terms of

his Employment Agreement with the Company."

10. I n response to his termination, Defendant Murthy acknowledged that he had a

personal relationship with a Company employee, which was against company policy, " [ i t was

a personal relationship. T h e company policy states that any two employees having a

relationship have to inform the superiors."


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11. O n 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.

12. T h e iGate employee who fi led a sexual harassment claim against Defendant

Murthy, Araceli Roiz ("Roiz"), was the Company's former head o f investor relations, and

according to media reports, was afforded special privileges, including joining Murthy in five

star accommodations while on business trips. Moreover, the reports claim that Roiz is bearing

Murthy's unborn child. According to reports, Murthy's inappropriate relationship with Roiz

was well known throughout the Company during the Class Period.

13. A s a result o f defendants' wrongful acts and omissions, and the precipitous

decline in the market value o f the Company's securities, Plaintiff and other Class members

have suffered significant losses and damages.

JURISDICTION AND VENUE

14. T h e claims asserted herein arise under and pursuant to Sections 10(b), 14(a) and

20(a) of the Exchange Act (15 U.S.C. §§ 78j(b), 78n(a) and 78t(a)) and Rule 10b-5 and 14a-9

promulgated thereunder (17 C.F.R. § 240.10b-5, 17 C.F.R. § 240.14a-9).

15. T h i s Court has jurisdiction over the subject matter of this action pursuant to § 27

of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331.

16. V e n u e is proper in this District pursuant to §27 of the Exchange Act, 15 U.S.C.

§78aa and 28 U.S.C. §1391(b), as iGATE's principal place of business is located within this

District.

17. I n connection with the acts, conduct and other wrongs alleged in this Complaint,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,


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including but not limited to, the United States mail, interstate telephone communications and

the facilities of the national securities exchange.

PARTIES

18. P l a i n t i f f , as set forth in the attached Certification, acquired iGATE securities at

artificially inflated prices during the Class Period and has been damaged thereby.

19. D e f e n d a n t iGATE is a Pennsylvania corporation with its principal executive

offices located at 6528 Kaiser Drive, Fremont, CA 94555. iGATE's common stock trades on

the NASDAQ under the ticker symbol "IGTE."

20. D e f e n d a n t Phaneesh Murthy ("Murthy") was the Company's Chief Executive

Officer ("CEO") and President between April 1, 2008 and May 20, 2013. Defendant Murthy

was a director on the Company's Board of Directors ("Board") between March 7, 2006 and

May 20, 2013.

SUBSTANTIVE ALLEGATIONS

Background

21. i G A T E provides full-spectrum consulting, technology and business process

outsourcing, and product & engineering solutions. Specifically, iGATE provides services that

include application development and management, verifi cation 8c validation, enterprise

application solutions, infrastructure management, customer interaction services & business

process outsourcing, product & engineering solutions, and business & technology consulting.

Materially False and MisleadingStatements Issued During the Class Period

22. O n March 14, 2012, the Company fi led an annual report for the period ended

December 31, 2011 on a Form 10-K with the SEC signed by, among others, the Individual

Defendants. where i t reiterated the Company's previously reported financial results and


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financial position. I n addition, the Form 10-K contained signed certifications pursuant to the

Sarbanes-Oxley Act of 2002 ("SOX") by the Individual Defendants stating that the financial

information contained in the Form 10-K was accurate, and disclosed any material changes to

the Company's internal control over financial reporting.

23. T h e For m 10 - K represented the following concerning the Company's

Leadership:

Our success is highly dependent on the efforts and abilities of ourChief Executive Offi cer, Phaneesh Murthy , and our seniormanagement team. This senior management team includes well-known thought leaders in IT-enabled services and all membershave significant experience with the onsite/offshore delivery modelwe employ.

24. O n March 16, 2012, the Company fi led a proxy statement on a Form 14A with

the SEC where it discussed the Company's Corporate Governance Guidelines and Code o f

Conduct. Specifically, the Form 14A represented that the Company's Board of Directors "has

adopted a set o f Corporate Governance Guidelines" and "has adopted a Code o f Conduct,

which serves as the Company's code o f ethics applicable to a ll employees and to the

independent directors with regard to their Company-related activities."

25. T h e Company's Code of Conduct Policy states the following in relevant part:

This Code of Conduct applies equally to all directors, officers andemployees. . T h e Board o f Directors has approved, and seniormanagement strongly endorses, this Code of Conduct and its strictenforcement. Each supervisor has the following important roles inimplementing this Code of Conduct:

• t o lead by example, complying with this Code o f Conductpersonally and demanding compliance in his or her work area;and

• t o listen carefully and act responsively in the event that analleged violation of this Code of Conduct is brought to his orher attention.


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relevant part:

* * *

Our people are our greatest asset. Our dealings with our fellowemployees, supervisor and subordinate alike, are based uponmutual trust and respect. Please act for the purpose of facilitatingthe lawful and ethical success of the Company. Be innovative inproblem solving. Facilitate open and honest communications.While i t sounds trite, be part o f the solution, not part o f theproblem. It goes without saying that we comply with all applicablelaws in all hiring decisions and in our conduct while on the job.

26. T h e Company's Corporate Governance Guidelines stated the following i n

In addition to its general oversight of the business and affairs of theCompany, the Board also performs a number of specific functions,including:

a. selecting, evaluating and compensating the Chief ExecutiveOfficer and President and overseeing Chief Executive Officerand President succession planning;

b. prov iding counsel and oversight on the selection, evaluation,development and compensation of senior management;

c. rev iewing, approving and monitoring fundamental financialand business strategies and major corporate actions;

d. assessing major risks fac ing the Company and reviewingoptions for their mitigation; and

e. ensuring that processes are i n place f o r maintaining theintegrity o f the Company, the integrity o f the fi nancialstatements, the integrity of compliance with law and ethics, theintegrity of relationships with customers and suppliers, and theintegrity of relationships with other stakeholders.

* * *

In addition to the duties of care and loyalty imposed by law, eachDirector has the following responsibilities:

* * *

Each Director w il l be familiar with, and w il l comply with, theterms o f the Company's Code o f Conduct Policy, inc ludingapplicable rules regarding trading in the Company's securities.


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27. Mo r e o v e r , during the Class Period, the Company published additional materials

on its website regarding iGate's policies, inc luding the "Code o f Conduct and Ethics

Applicable to Employees, Officers, Executive Directors and Whole Time Directors o f the

Company" (the, "Code of Conduct and Ethics"). The Code of Conduct and Ethics states:

The organization will tolerate no form of harassment including harassmentfor race, caste, religion, spiritual beliefs, disability, age, or gender bymanagement and supervisory staff, co-workers, employees, customers,vendors, business associates and non-employees [ov er whom theOrganization exercises some measure o f direct control] o n o r o f fOrganization premises. No verbal or physical conduct by any employee,that harasses, disrupts, or interferes with another's work performance orthat creates an intimidating, offensive, or hostile environment, w il l betolerated.

Sexual Harassment deserves a special mention here. Unwelcome sexualadvances, request for sexual favours, and other physical, verbal, or visualconduct based on sex, constitute sexual harassment when these acts areunilateral, whether intentional or unintentional, and unwelcome by theother person. A conduct will be deemed as sexual harassment if:

The harasser, either implic it ly o r explic itly suggests careeradvancement or other work related favours i f the one harassedsubmits to his/her advances.

Conduct has a purpose or effect of unreasonably interfering withthe individual's performance or creating an intimidating, hostile oroffensive work environment.

No supervisor is to threaten or suggest, either explicitly or implicitly, thatan employee's refusal or willingness to submit to sexual advances willaffect the employee's terms or conditions of employment.

Other sexually harassing or offensive conduct in the workplace that can becalled sexual harassment includes:

Unwanted physical contact or conduct o f any k ind, includingsexual flirtations, touching, advances, or propositions.

Verbal harassment o f a sexual nature, such as lewd comments,sexual jokes or references, and offensive personal references.


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Demeaning, insulting, spreading rumours about lewd behaviour,intimidating, or sexually suggestive comments about an individual.

The display in the workplace of demeaning, insulting, intimidating,or sexually suggestive objects, pictures, or photographs.

Demeaning, insulting, intimidating, or sexually suggestive written,recorded, or electronically transmitted messages, including e-mailsand SMS that are not appreciated by the receiver.

Physical confinement against one's will and any other act likely toviolate ones dignity and privacy.

Any other instance of sexual harassment as may be defined underthe local laws o f the land where such offence may have beencommitted.

(Emphasis Added)

28. O n March 18, 2013, the Company fi led an annual report for the period ended

December 31, 2012 on a Form 10-K with the SEC signed by, among others, Murthy which

reiterated the Company's previously reported financial results and financial position. I n

addition, the Form 10-K contained signed certifications pursuant to SOX by the Individual

Defendants stating that the financial information contained in the Form 10-K was accurate, and

disclosed any material changes to the Company's internal control over financial reporting.

29. T h e For m 10- K represented the following concerning the Company's

Leadership:

The efforts and abilities of our Chief Executive Officer, PhaneeshMurthy, and our senior management team have contributed greatlyto our success. Our senior management team includes well-knownthought leaders in IT-enabled services and a ll members havesignificant experience with the onsite/offshore delivery model weemploy.

30. O n March 26, 2013, the Company fi led a proxy statement on a Form 14A with

the SEC where it discussed the Company's Corporate Governance Guidelines and Code of

Conduct. Specifically, the Form 14A represented that the Company's Board of Directors "has


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adopted a set o f Corporate Governance Guidelines" and "has adopted a Code o f Conduct,

which serves as the Company's code o f ethics applicable to all employees, including its

principal executive officer, principal accounting officer or controller, and any other persons

performing s imilar functions, as well as to the independent directors with regard to their

Company-related activities."

31. T h e statements referenced in 2 3 - 3 0 above were materially false and/or

misleading because they misrepresented and failed to disclose the following adverse facts,

which were known to defendants or recklessly disregarded by them, including that: ( i) the

Company's Chief Executive Officer and President was involved in an improper relationship

with a subordinate in violation of iGATE's stated policies; and (ii) Murthy's improper conduct

jeopardized his tenure at the Company, creating a risk to the Company's future financial

prospects.

THE TRUTH EMERGES

32. O n May 20, 2013, the Company issued a press release disclosing "that its Board

of Directors has decided to terminate the employment o f President and CEO Phaneesh

Murthy," effective immediately. Further, the Company disclosed the following:

The Board's decision was made as a result of an investigation byoutside legal counsel, engaged by the Board, o f the facts andcircumstances surrounding a relationship Mr. Murthy had with asubordinate employee and a c laim o f sexual harassment. T h einvestigation, which is ongoing, has reached the finding that Mr.Murthy's failure to report this relationship v iolated iGATE'spolicy, as well as Mr. Murthy's employment contract.


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33. O n this news, iGATE securities declined $1.58 per share or nearly 10%, to close

at $14.82 per share on May 21, 2013.

34. O n May 22, 2013, during a teleconference call with the media, Defendant

Murthy admitted that he had violated the company's explicit policies. Specifically, Defendant

Murthy revealed the following:

Recently I learnt that a lady Araceli Roiz, who is investor relationshead of iGate, fi led charges claiming sexual harassment against mewith the company. The charges are completely false but pursuantto a relationship I had with her, the company thought it fi t tobelieve I v iolated the company's policy and terminated myemployment. T he charges were fi led few days ago with a lettergoing to the company related to a relationship I had for the pastfew months.

***

It was a personal relationship. The company policy states that anytwo employees having a relationship have to inform the superiors.

It is a small note in an employee handbook. I did inform thecompany about the relationship. Though i t was a question o ftiming from my side as I disclosed this only a few weeks ago, onlyafter the relationship was over. I do not know what the chargesare, as the letter went directly to the company.

35. O n May 22, 2013, the media started to investigate the events surrounding

Defendant Murthy's termination. Spec ifi cally , Financ ial Express reported several news

articles about the recent revelations. I n one article entitled, Financial Express stated the

following in relevant part:

It's deja vu for Phaneesh Murthy, as he rushed in to try and defendhimself once again against sexual harassment charges, hours afterthe board o f directors o f iGate Corporation terminated hisemployment.

* * *

COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS- 11

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An ITT-IIM alumnus, Murthy rose through the ranks of Infosys tobecome the head of its global operations. The 49-year-old techie-turned business executive, however, fell from grace in 2002 whenInfosys forced him quit the company after a charge o f sexualharassment by his personal assistant.

36. I n a follow-up article, Financial Express reported the following in relevant part:

iGate chief executive Phaneesh Murthy's exit from the companyhas placed the promising IT major under a cloud with regard to itsfuture, considering that the man in question was its strategicdecision maker who was busy putting together a business modelthat he claimed would threaten other Indian IT vendors.

iGate, a US company with significant presence in India, hasappointed Gerhard Watzinger as the interim head with the searchon for a full time executive. The task before the new CEO wouldbe very challenging as the company would have to address manyconcerns ranging from corporate reputation, customer acquisitionand stock market performance, according to analysts and industryobservers.

* * *

Now, w ith the departure o f Murthy who was instrumental indriving iGate's outcome-based pricing model, the company faces atough task of hunting for new customers. A n analyst who did notwish t o be identifi ed said, "Murthy 's ex is t w i l l impact thecompany when they go for new customer acquisition as he was theface of the firm."

Murthy had built an image o f being larger than life with theavowed aim of taking on the big boys of the Indian IT industry.This has possibly made the task o f finding a new successor abigger challenge for iGate. Las t year, iGate under the leadershipof Murthy had unleashed an aggressive multimedia campaigntargeted at large corporations in North America in order to shift theoutsourcing model from an efforts-based model to a strategicresults-based approach.

Mukherji of Avasant said, "Going by his profile, Murthy did notallow anybody else to become the face o f the organization. H ewas a great marketing guy and he always cashed in on it."


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following:

37. O n May 22, 2013, the Company fi led a Form 8-K with the SEC disclosing the

On May 20, 2013, Phaneesh Murthy was terminated as ChiefExecutive Offi cer and President o f iGATE Corporation (the"Company"), effective immediately. T h is termination was "forcause", and Mr. Murthy is not entitled to severance payment underthe terms of his Employment Agreement with the Company.

38. O n 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.

PLAINTIFF'S CLASS ACTION ALLEGATIONS

39. P l a i n t i f f brings this action as a class action pursuant to Federal Rule of Civ il

Procedure 23(a) and (b)(3) on behalf of a Class, consisting o f all those who purchased or

otherwise acquired iGATE securities during the Class Period (the "Class"); and were damaged

thereby. Exc luded from the Class are defendants herein, the officers and directors of the

Company, a t a l l relevant times, members o f their immediate families and their legal

representatives, heirs, successors or assigns and any entity in which defendants have or had a

controlling interest.

40. T h e members o f the Class are so numerous that joinder o f all members is

impracticable. Throughout the Class Period, iGATE securities were actively traded on the

NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and

can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds

or thousands of members in the proposed Class. Record owners and other members of the

Class may be identified from records maintained by iGATE or its transfer agent and may be

notified o f the pendency o f this action by mail, using the form o f notice similar to that

customarily used in securities class actions.


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41. P la in t i f f ' s claims are typical o f the claims of the members of the Class as all

members of the Class are similarly affected by defendants' wrongful conduct in violation of

federal law that is complained of herein.

42. P l a i n t i f f will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation.

Plaintiff has no interests antagonistic to or in conflict with those of the Class.

43. C o m m o n questions o f law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

• whether the federal securities laws were violated by defendants' acts as allegedherein;

• whether statements made by defendants to the investing public during the ClassPeriod misrepresented material facts about the business, operations and managementof iGATE;

• whether the Individual Defendants caused iGATE to issue false and misleadingfinancial statements during the Class Period;

• whether defendants acted knowingly or recklessly in issuing false and misleadingfinancial statements;

• whether the prices o f iGATE securities during the Class Period were artificiallyinflated because of the defendants' conduct complained of herein; and

• whether the members of the Class have sustained damages and, i f so, what is theproper measure of damages.

44. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members o f the Class to individually


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redress the wrongs done to them. There will be no difficulty in the management of this action

as a class action.

45. P l a i n t i f f will rely, in part, upon the presumption of reliance established by the

fraud-on-the-market doctrine in that:

• defendants made public misrepresentations or failed to disclose material facts duringthe Class Period;

• t h e omissions and misrepresentations were material;

• i G A T E securities are traded in an efficient market;

• t h e Company's shares were liquid and traded with moderate to heavy volume duringthe Class Period;

• t h e Company traded on the NASDAQ and was covered by multiple analysts;

• t h e misrepresentations and omissions alleged would tend to induce a reasonableinvestor to misjudge the value of the Company's securities; and

• P la in t i f f and members o f the Class purchased, acquired and/or sold iGATEsecurities between the time the defendants failed to disclose or misrepresentedmaterial facts and the time the true facts were disclosed, without knowledge of theomitted or misrepresented facts.

46. B a s e d upon the foregoing, Plaintiff and the members of the Class are entitled to

a presumption of reliance upon the integrity of the market.

COUNT

(Against All Defendants For Violations ofSection 10(b) and Rule 10b-5 Promulgated Thereunder)

47. P l a i n t i f f repeats and realleges each and every allegation contained above as i f

fully set forth herein.

48. T h i s Count is asserted against defendants and is based upon Section 10(b) of the

Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.


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49. D u r i n g the Class Period, defendants engaged in a plan, scheme, conspiracy and

course o f conduct, pursuant to which they knowingly o r recklessly engaged i n acts,

transactions, practices and courses o f business which operated as a fraud and deceit upon

Plaintiff and the other members of the Class; made various untrue statements of material facts

and omitted to state material facts necessary in order to make the statements made, in light of

the circumstances under which they were made, not misleading; and employed devices,

schemes and artifices to defraud in connection with the purchase and sale of securities. Such

scheme was intended to, and, throughout the Class Period, did: ( i) deceive the investing public,

including Plaintiff and other Class members, as alleged herein; ( ii) artifi cially inflate and

maintain the market price of iGATE securities; and ( iii) cause Plaintiff and other members of

the Class to purchase or otherwise acquire iGATE securities and options at artificially inflated

prices. I n furtherance of this unlawful scheme, plan and course of conduct, defendants, and

each of them, took the actions set forth herein.

50. Pu r s u a n t to the above plan, scheme, conspiracy and course of conduct, each of

the defendants participated directly or indirectly in the preparation and/or issuance o f the

quarterly and annual reports, SEC fi lings, press releases and other statements and documents

described above, including statements made to securities analysts and the media that were

designed to influence the market for iGATE securities. Suc h reports, fi lings, releases and

statements were materially false and misleading in that they failed to disclose material adverse

information and misrepresented the truth about iGATE's finances and business prospects.

51. B y virtue of their positions at iGATE, defendants had actual knowledge of the

materially false and misleading statements and material omissions alleged herein and intended

thereby to deceive Plaintiff and the other members o f the Class, or , in the alternative,


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defendants acted with reckless disregard for the truth in that they failed or refused to ascertain

and disclose such facts as would reveal the materially false and misleading nature o f the

statements made, although such facts were readily available to defendants. Sa id acts and

omissions of defendants were committed willfully or with reckless disregard for the truth. I n

addition, each defendant knew or recklessly disregarded that material facts were being

misrepresented or omitted as described above.

52. I n f o r ma t io n showing that defendants acted knowingly or with reckless disregard

for the truth is peculiarly within defendants' knowledge and control. A s the Chief Executive

Officer of iGATE, Murthy had knowledge of the details of iGATE's internal affairs.

53. M u r t h y is liable both directly and indirectly for the wrongs complained o f

herein. Because o f his position o f control and authority, the Murthy was able to and did,

directly or indirectly, control the content of the statements of iGATE. A s an officer and/or

director of a publicly-held company, Murthy had a duty to disseminate timely, accurate, and

truthful information with respect to iGATE's businesses, operations, future financial condition

and future prospects. A s a result o f the dissemination o f the aforementioned false and

misleading reports, releases and public statements, the market price o f iGATE securities was

artificially inflated throughout the Class Period. I n ignorance of the adverse facts concerning

iGATE's business and financial condition which were concealed by defendants, Plaintiff and

the other members of the Class purchased or otherwise acquired iGATE securities at artificially

inflated prices and relied upon the price of the securities, the integrity o f the market for the

securities and/or upon statements disseminated by defendants, and were damaged thereby.

54. D u r i n g the Class Period, iGATE securities were traded on an active and efficient

market. Pla in t i f f and the other members o f the Class, relying on the materially false and


misleading statements described herein, which the defendants made, issued or caused to be

disseminated, or relying upon the integrity of the market, purchased or otherwise acquired

shares of iGATE securities at prices artificially inflated by defendants' wrongful conduct. Had

Plaintiff and the other members of the Class known the truth, they would not have purchased or

otherwise acquired said securities, or would not have purchased or otherwise acquired them at

the inflated prices that were paid. A t the time of the purchases and/or acquisitions by Plaintiff

and the Class, the true value of iGATE securities was substantially lower than the prices paid

by Plaintiff and the other members o f the Class. T h e market price o f iGATE securities

declined sharply upon public disclosure of the facts alleged herein to the injury of Plaintiff and

Class members.

55. B y reason of the conduct alleged herein, defendants knowingly or recklessly,

directly or indirectly, have violated Section 10(1)) o f the Exchange Ac t and Rule 101)-5

promulgated thereunder.

56. A s a direct and proximate result of defendants' wrongful conduct, Plaintiff and

the other members of the Class suffered damages in connection with their respective purchases,

acquisitions and sales of the Company's securities during the Class Period, upon the disclosure

that the Company had been disseminating misrepresented financial statements to the investing

public.

COUNT II

(Against Murthy and iGATE For Violationsof Section 14(a) of the Exchange Act And Rule 14a-9 Promulgated Thereunder)

57. P l a i n t i f f repeats and realleges each and every allegation contained in the

foregoing paragraphs as if fully set forth herein.


58. D u r i n g the Class Period, Murthy caused iGATE to disseminate the false and

misleading Proxies specified above, which failed to disclose material facts regarding Defendant

Pedersen's pledges of iGATE stock that would have made the statements in the Proxies, in light

of the circumstances under which they were made, not misleading. A s set forth above, the

Proxies omitted to state material facts necessary to make the statements in the Proxies not

misleading, in violation of Regulation 14a-9.

59. T h e Proxies were reviewed and/or disseminated by the Company's Board o f

Directors, inc luding Murthy. T h e Proxies misrepresented and/or omitted material facts,

including material information concerning Defendant Murthy's violation of the Company's

Corporate Governance Guidelines and Code of Conduct. By virtue of their positions within the

Company, as well as their personal knowledge of Defendant Murthy's improper relationship

and behaviors, Murthy had a duty to disclose this information in the Proxies.

60. M u r t h y was at least negligent in fi ling the Proxies w ith the above-noted

materially false and/or misleading statements.

61. T h e omissions and false and misleading statements in the Proxies are material in

that a reasonable shareholder would have considered them important in deciding how to vote

on the various matters set forth in the Proxies for shareholder action. I n addition, a reasonable

shareholder would view a full and accurate disclosure as significantly altering the "total mix" of

information made available in the Proxies.

62. B y reason of the foregoing, the Director Defendants violated section 14(a) of the

Exchange Act and SEC Rule 14a-9(a) promulgated thereunder.


E

COUNT I I I

(Violations of Section 20(a) of theExchange Act Against Murthy)

63. P l a i n t i f f repeats and realleges each and every allegation contained in the

foregoing paragraphs as if fully set forth herein.

64. D u r i n g the Class Period, Murthy participated in the operation and management

of iGATE, and conducted and participated, directly and indirectly, in the conduct of iGATE's

business affairs. Because o f his senior position, Murthy knew the adverse non-public

information about iGATE' published representations.

65. A s an officer and/or director of a publicly owned company, Murthy had a duty

to disseminate accurate and truthful information with respect to iGATE's compliance with its

stated Company policies and to correct promptly any public statements issued by iGATE which

had become materially false or misleading.

66. Be c a u s e his position of control and authority as a senior officer, Murthy was

able to, and did, control the contents of the various reports, press releases and public fi lings

which iGATE disseminated in the marketplace during the Class Period concerning iGATE's

future prospects and compliance with its Code o f Conduct. T hr oughout the Class Period,

Murthy exercised his power and authority to cause iGATE to engage in the wrongful acts

complained o f herein. Murthy therefore, was a "controlling person" o f iGATE within the

meaning of Section 20(a) of the Exchange Act. I n this capacity, he participated in the unlawful

conduct alleged which artificially inflated the market price of iGATE securities.

67. B y reason of the above conduct, Murthy is liable pursuant to Section 20(a) of

the Exchange Act for the violations committed by iGATE.


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PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment against defendants as follows:

A. D e t e r m in in g that the instant action may be maintained as a class action under

Rule 23 o f the Federal Rules o f Civ il Procedure, and certify ing Plaintif f as the Class

representative;

B. R e q u i r i n g defendants to pay damages sustained by Plaintiff and the Class by

reason of the acts and transactions alleged herein;

C. A w a r d i n g Plaintiff and the other members o f the Class prejudgment and post

judgment interest, as well as their reasonable attorneys' fees, expert fees and other costs; and

D. A w a r d i n g such other and further relief as this Court may deem just and proper.

DEMAND FOR TRIAL BY JURY

Plaintiff hereby demands a trial by jury.

Dated: June 14, 2013 R e s p e c t f u l l y submitted,


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