In the petition submitted to the Northern District Court of California, it was claimed that Nvidia and Huang misled investors by violating the relevant provisions of the Securities Exchange Act of 1934.
In the petition, it was argued that Nvidia’s statements that there was no evidence that its chips were directed to China and Jensen Huang’s statements that business relations with Megaspeed were “normal” were misleading. It was claimed that the statements in question did not reflect the truth because Jensen Huang did not disclose his relationship with Alice Huang, who is suspected of spying on behalf of China.
The plaintiff claimed that Nvidia and Huang did not disclose information that raised national security concerns that could threaten the company’s reputation and future commercial prospects, and demanded compensation for the damages suffered by investors.
Nvidia Board of Directors announced in a statement on November 8 that an independent investigation was launched following the news that Huang was the target of foreign intelligence activity.
The investigation was launched after reports that Huang had a close relationship with a Chinese businessman who allegedly passed information to the Beijing administration.
In the news published in The New York Times, it was claimed that Alice Huang, the former manager of Megaspeed, who was stated to have a close relationship with Huang, was operating on behalf of Chinese intelligence and passing information to the Beijing administration.
Nvidia CEO Jensen Huang stated in his message to his employees that he was not faithful to his wife and that he supported the independent investigation initiated by the company’s Board of Directors and would fully cooperate. “I am committed to protecting Nvidia and supporting the national security of the United States,” Huang said. He used the following expressions:
Following these developments, Nvidia shares lost 4.27 percent of their value on November 9 and finished the day at $178.67.
