Cognizant Technology Solutions has reached a proposed settlement in a stockholder derivative case that, if approved, will end litigation filed in 2021 over allegations tied to foreign corruption compliance, false statements and stock repurchases.
The proposed deal was struck after years of discovery fights, motion practice and mediation. The case began after a demand letter sent to Cognizant’s board on April 29, 2019, which the company’s demand review committee rejected in June 2019. The complaint was filed June 1, 2021, and the court later allowed limited discovery after denying motions to dismiss in November 2022.
The settlement follows a mediation session on Oct. 15, 2024, and a later double-blind proposal accepted in July 2025. Under the agreement, the company will receive a monetary payment from its directors’ and officers’ insurance carriers. The notice does not specify the amount in the excerpt provided.
The underlying allegations centered on claims that directors and officers breached fiduciary duties by allowing conduct that led to Foreign Corrupt Practices Act violations, made false statements, and caused Cognizant to repurchase shares at excessive prices. The plaintiff also argued the alleged conduct exposed the company to securities litigation, which Cognizant separately settled for $95 million, with most of that amount paid by insurers.
The procedural record shows the fight intensified after the court denied dismissal motions on Nov. 30, 2022 and ordered limited discovery into whether the board had wrongfully refused the 2019 demand. Discovery disputes continued through 2024 and into 2025, including multiple privilege logs and revisions before the parties said the dispute had been resolved in April 2025.
A settlement hearing is set for Sept. 14, 2026, at 11:00 a.m. in Newark, New Jersey. If approved, the derivative action will be dismissed with prejudice. Following these announcements, the company's shares moved -1.91%, and are now trading at a price of $42.57. Check out the company's full 8-K submission here.
