Multiple prominent US-based law firms have initiated investigations into HDFC Bank to assess potential violations of federal securities laws. The legal probes, spearheaded by Glancy Prongay Wolke & Rotter, along with the Law Offices of Frank R. Cruz and Howard G. Smith, aim to evaluate whether the private lender actively misled its US investors.
The investigations cite recent reports by The Indian Express, which alleged that HDFC Bank made undisclosed financial payments to the Maharashtra State Road Development Corporation (MSRDC) in order to attract large institutional deposits.
According to the allegations, the bank disguised these payments to the MSRDC as marketing expenses rather than standard banking payouts.
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To ascertain the impact of these alleged infractions, the law firms are actively seeking information from investors who incurred financial losses trading HDFC Bank's American Depositary Receipts (ADRs).
Shareholders are being asked to step forward and share pertinent documents alongside details of their investment losses.
The information gathered during this inquiry may help the firms determine whether a formal US securities class action lawsuit against the bank is warranted. However, the legal representatives have clarified that, as of now, no US securities class action has been filed against HDFC Bank.
Reacting to the development, HDFC Bank ADRs fell 1.5% to a low of $22.66. As of 10:15 am EST, the ADRs traded 1.2% lower at $22.92 as of 10:15 a.m.
ALSO READ: HDFC Bank ADRs Fall 1.5% After US Law Firms Urge Investors To Report Trading Losses
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