Shareholders cry and lawsuits fly over Jensen Huang’s spy ties!
On Tuesday, a shareholder filed a lawsuit against Nvidia and its CEO Jensen Huang in the fallout of the Chinese spy scandal that has engulfed Silicon Valley and more recently, Washington D.C. in recent days. The lawsuit accuses the company and Huang of misleading and deceiving investors about the scandal, which may have been an act of corporate espionage and an attempt by China to access Nvidia’s technology.
As more has come to light, the lawsuit says that Huang was “directly or indirectly involved in drafting, producing, reviewing and/or disseminating her false and misleading statements and information” regarding Huang’s relationship with Alice Huang, “a Megaspeed executive and suspected Chinese spy, who is suspected of seeking to help smuggle NVIDIA products into China.”
The lawsuit was filed by Mark Kistenmacher, who, in the filing, says that “As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” and that Kristenmacher and others bought Nvidia shares at “artificially inflated” prices — which they may not have done, had they known the full story.
In effect, shareholders believe that they were misled by the company, which knew there was something damaging waiting in the wings, and didn’t disclose it. Kistenmacher is seeking unspecified damages as a result of the lawsuit, and a jury trial.
Fast Company has reached out to Nvidia for comment.
Nvidia shares were down around 6% on Tuesday as of 11 am ET, and are down 17.5% over the past five days. In all, almost $700 billion, though it remains above $4 trillion overall.
On November 8, Huang published an open letter on Nvidia’s website, offering an apology to his family and the company and admitting to the affair, while also noting that the company’s board of directors was also investigating the matter.
“I support the investigation and will cooperate fully. I love our country and our company. I am committed to protecting NVIDIA and supporting America’s national security,” he wrote. “I am proud and grateful to be an American.”