Yesterday, a proposed class action complaint was filed against both Nvidia and its CEO, Jensen Huang, in the United States District Court for the Northern District of California. The complaint accuses Nvidia and Huang of intentionally “misleading” shareholders by issuing “materially false” statements to the press, following reports that its CEO fell victim to a “honeypot operation” with Megaspeed executive and alleged Chinese spy Alice Huang.
As reported by The Guardian, the proposed complaint was filed on behalf of Nvidia shareholder Mark Kistenmacher by Rosen Law Firm on November 9. According to the complaint, which directly names both Nvidia and Huang, the plaintiff “seeks to recover compensable damages” on behalf of Nvidia’s shareholders following “the precipitous decline in the market value of the Company’s securities.” Following Huang’s statement on November 8 that he had been unfaithful to his wife of 41 years, Nvidia’s stock fell by roughly 4.27 percent when U.S. markets closed on November 9, representing hundreds of billions of dollars in lost value.
According to an internal U.S. intelligence memo acquired by the Financial Times, U.S. intelligence believes that Alice Huang was recruited “by China’s Ministry of State Security intelligence agency” to spy on Nvidia’s CEO.
The complaint directly quotes statements provided to The New York Times and Bloomberg by both Nvidia spokesperson John Rizzo and CEO Jensen Huang as a result of the outlets’ coverage of Huang’s alleged affair with Megaspeed executive Alice Huang. More specifically, the proposed complaint quotes an interview with Jensen Huang in The New York Times’ October 29 report and accuses the Nvidia CEO of misleading shareholders by describing the company’s dealings with Megaspeed as “normal and not unusual.”
However, while The Rosen Law Firm is the first firm to take official legal action against Nvidia and its CEO over Huang’s affair, it certainly sounds like they won’t be the last. According to TechCrunch’s report, “at least” four legal firms, including “Schall, Brown & Schwartz and Levi & Korsinsky,” announced investigations into whether Nvidia misled investors on November 9.
