8-KRegulation FD

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Regulation FD Disclosure (Sep 7, 2021)

Filed September 7, 2021For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) has announced a significant development regarding a previously disclosed securities class action lawsuit. The company has entered into a settlement agreement to resolve allegations related to false or misleading statements concerning potential Foreign Corrupt Practices Act (FCPA) violations, the company's business, prospects, operations, and internal controls. This settlement, filed with the court on September 7, 2021, is subject to court approval. Under the terms of the settlement, Cognizant will pay $95 million to the putative class, which includes attorneys' fees and litigation expenses. Importantly, the majority of this settlement amount will be covered by the company's directors and officers (D&O) insurance policies. While the policies will be exhausted for this matter, the company and the defendants expressly deny any wrongdoing or validity of the claims asserted. This settlement aims to conclude the protracted litigation, thereby eliminating associated uncertainty, burden, and expense.

Key Highlights

  • 1Cognizant reaches a $95 million settlement to resolve a securities class action lawsuit.
  • 2The lawsuit alleged violations of the Exchange Act based on misleading statements regarding FCPA, business operations, and internal controls.
  • 3The settlement period covers purchases of common stock between February 27, 2015, and September 29, 2016.
  • 4A substantial majority of the settlement cost will be covered by the company's D&O insurance policies.
  • 5The company and defendants deny all allegations and claims made in the lawsuit.
  • 6The settlement is subject to approval by the United States District Court for the District of New Jersey.
  • 7This agreement aims to resolve the litigation, mitigating future uncertainty, burden, and expense.

Frequently Asked Questions

This 8-K filing is primarily to disclose that Cognizant Technology Solutions Corporation has entered into a settlement agreement to resolve a consolidated putative securities class action complaint. This settlement aims to end the litigation concerning alleged false or misleading statements made between February 27, 2015, and September 29, 2016.

The settlement amount is $95 million, which includes attorneys' fees and litigation expenses. A substantial majority of this payment will be covered by Cognizant's directors and officers (D&O) insurance policies. After this payment, the applicable insurance policies will be exhausted for this matter.

No, Cognizant and the other defendants expressly deny that the plaintiffs have asserted any valid claims as to any of them. The company is entering into the settlement primarily to eliminate the uncertainty, burden, and expense associated with further protracted litigation.

No, the settlement agreement is subject to the approval of the United States District Court for the District of New Jersey. Until court approval is obtained, the settlement is not finalized.