US court dismisses bribery case against 2 former executives of Cognizant: Report

Cognizant

In a relief to two former Cognizant executives, Gordon Coburn and Steven Schwartz, a US federal judge granted a motion to dismiss bribery charges against them.

US district judge Michael Farbiarz in New Jersey dismissed the case on April 4, barring prosecutors from reopening the matter, a report by the New York Post said.

The ruling followed a fresh motion from attorney Alina Habba who argued that US President Donald Trump's March executive order invalidated the basis for continuing the trial under the Foreign Corrupt Practices Act (FCPA).

In 2024, Farbiarz gave the government a six-month postponement to allow testimony from key witnesses, including one whose passport was reportedly held by India’s Enforcement Directorate.

But after the March order, which suspended enforcement of the FCPA on grounds that it put US firms at a disadvantage abroad, prosecutors changed course.

Despite initial resistance from the judge, who had denied a separate request for a further delay, Habba’s renewed bid to drop the case succeeded.

In 2021, the Nasdaq-listed company reached a $95- million settlement in a lawsuit filed by the company. The bribery case came to light in 2016. The company settled with the US Securities and Exchanges Commission for $25 million in February 2019.

Five class-action suits were filed between October and November 2016 and consolidated into a single class suit in the New Jersey district court.

Also read: Cognizant, L&T bribery cases: Key allegations explained

What was the case?

The two former Cognizant executives allegedly “authorised an unlawful payment of approximately $2 million to one or more foreign government officials in India”. The bribe was for getting clearances to construct the IT major’s 2.7 million square ft new campus in Chennai in 2014, reports said.

The case dates back to 2016 when Cognizant said it was conducting an internal investigation into what it termed as “improper payments.” Executives named in the case included shareholders accusing the firm of concealing bribes to officials in India.