Two US law firms file class action suit against Satyam

Two US-based law firms -- Izard Nobel LLP and Vianale & Vianale LLP -- have filed class action lawsuits against Satyam Computer Services on behalf of shareholders who have American Depository Receipts (ADRs) of the company.

A 'class action' is a civil suit brought by one or more people on behalf of themselves and others who are similarly situated.

The lawsuits are among the first legal actions taken against the management of Satyam whose founder and Chairman Ramalinga Raju said, "I am now prepared to subject myself to the laws (Satyam is listed on NYSE too) of the land and face consequences thereof," while admitting to falsfying the company's balance sheet, and announcing his resignation on January 7.

The New York Stock Exchange (NYSE) yesterday stated that "NYSE Regulation is currently evaluating the news relating to Satyam and will closely monitor further developments. The security will remain halted until further notice".

Nobel, which has significant experience representing investors in prosecuting claims of securities fraud, said the lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of those who purchased the ADRs between January 6, 2004 and January 6, 2009, inclusive (the “Class Period”).

The complaint charges that Satyam and certain of its executives violated federal securities laws by issuing materially false and misleading statements.

The law firm of Vianale & Vianale LLP, too, made a similar annoucement for the same period. The action is pending in Manhattan federal court. The complaint alleges that the company and its top executives violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading financial statements.