The Rosen Law Firm filed a class action lawsuit against Nvidia after the company’s CEO Jensen Huang admitted that he had an extramarital affair with a woman who is now suspected of spying for China. This lawsuit threatens to not be the last.
Image source: nvidia.com
The situation around Nvidia is heating up. Jensen Huang recently admitted that he actually had a romantic relationship with Alice Huang. She, according to American intelligence services, may be an agent of Chinese intelligence, who was tasked with assisting in the smuggling of Nvidia graphics processors into the country. The incident threatens the company with a wave of class action lawsuits and inspections.
This development of events seems to be expected. US securities laws allow shareholders to sue a company if its management misrepresents facts or takes actions that could cause its stock price to decline. The shareholders’ claims have grounds: Nvidia shares actually sank after information about Jensen Huang’s adultery and its possible consequences hit the media.
A series of legal proceedings will likely follow. The first class action lawsuit to date has been filed by Rosen Law Firm. The document alleges that Nvidia and Jensen Huang hid information about his relationship with Alice or misled investors; lied about it when asked a direct question; created a threat to national security and damaged the company’s reputation.
Nvidia really tried to downplay the significance of Jensen and Alice’s relationship. “Megaspeed was no different from many of our other regional cloud clients. Meetings with clients are the responsibility of the General Manager; Jensen interacts with thousands of client executives every year,” Nvidia said.
Other law firms also initiated their own investigations, based on similar arguments. The law firm of Frank R. Cruz cited the 8.8% decline and invited shareholders with losses of at least $50,000 to participate. As with most class action lawsuits, participation in the proceedings does not require plaintiffs to make any upfront payment. Law firms typically receive a percentage of the award or settlement resulting from a lawsuit. Some of them, for example, Levi & Korsinsky, are ready to represent the interests of even those investors who have already sold their Nvidia shares at a loss; There is no minimum threshold for the amount of such losses.
The FBI has also begun an investigation into the incident, said US President Donald Trump. He admitted that he was “amazed” by this information about Huang, who is one of the head of state’s closest allies in Silicon Valley. He talked with Huang, and he assured him that he did not even suspect that this woman was involved in espionage. “As far as I know, the FBI is looking into this matter. I think he’ll be fine,” Trump said.
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