The Audit Committee of Infosys Technologies’ board of directors has imposed a penalty of Rs 5 lakh on Mr Gopalakrishnan and fine of  $2,000 on Mr Lehman as they failed to comply with the insider trading norms of the company, Infosys said in a notice to US Securities & Exchange Commission.

According to Insider Trading Rules, a director, officer or other designated employees of the firm may buy or sell its securities only after prior notification and must notify within one business day following any change in his or her shareholding.

The process requires the employee to apply to firm’s compliance officer for pre-clearance of each of such transaction and provide certain information and undertakings to the company through its compliance officer.

On December 24, 2007, Mr Gopalakrishnan, inherited 12,800 equity shares from his mother but he failed to notify the company which led to imposition of Rs 5 lakh penalty.

Likewise, on December 7, 2007, Jeffrey Sean Lehman, independent Director of Infosys sold 900 American Depositary Shares (ADSs) of the company. Though, Mr Lehman notified the company of his intent to sell his ADSs, he, however, failed to seek approval of company’s compliance officer and requisite information in advance of such sale, which were violation of firm’s Insider Trading Rules. The company’s audit committee imposed a penalty of  $2,000 upon Mr Lehman.