Nvidia Hit With Class Action as Shares Slide 4.27 Percent
(MENAFN) Nvidia and CEO Jensen Huang are being sued by shareholders who accuse them of misleading investors by concealing Huang’s alleged relationship with a former executive of Megaspeed, according to court documents filed Monday.
The suit landed one day after Nvidia’s board announced an independent investigation into Huang, following reports that he had been targeted by foreign intelligence operations.
Filed in the US District Court for the Northern District of California, the complaint charges Nvidia and Huang with violating provisions of the Securities Exchange Act of 1934. Shareholder Mark Kistenmacher, represented by The Rosen Law Firm, brought the case on behalf of a proposed class of investors who bought or otherwise acquired Nvidia securities between Oct. 9, 2025 and Nov. 8, 2026.
At the heart of the filing are two sets of statements the plaintiff calls materially misleading: Nvidia’s assertion that a review found no evidence its chips were diverted elsewhere, and Huang’s description of the company’s dealings with Singapore-based Megaspeed International as “normal,” The plaintiff alleges those statements omitted Huang’s alleged personal relationship with Alice Huang, a former Megaspeed executive suspected of gathering intelligence for China.
The complaint further contends the defendants withheld national security concerns that could endanger Nvidia’s reputation and future business, and that their statements and omissions artificially inflated the share price throughout the proposed class period.
The court filing says Nvidia shares tumbled 4.27% on Monday to close at $178.67 after the revelations. The plaintiff seeks unspecified compensatory damages for affected investors.
Board Backs Huang Amid Probe
A committee of independent directors, assisted by outside legal counsel, will lead the investigation, Nvidia said. The board added that Huang supports the review and has pledged to cooperate.
The company emphasized that the board currently has no reason to believe US national security or Nvidia’s confidential information was compromised, but said the inquiry will examine all available information. Directors voiced confidence in Huang and his leadership team and promised further updates as appropriate.
Two major newspapers reported allegations that Alice Huang worked for Chinese intelligence, drawing scrutiny to the Nvidia chief’s personal relationship and what it could mean for the company.
Beijing denied the claims Monday. Foreign Ministry spokesperson Guo Jiakun told a news briefing in Beijing that the spy allegations were baseless speculation.
The probe places the leadership of a pivotal player in the global artificial intelligence industry under scrutiny. Nvidia’s chips underpin much of the computing infrastructure used to build and run AI models.
The suit landed one day after Nvidia’s board announced an independent investigation into Huang, following reports that he had been targeted by foreign intelligence operations.
Filed in the US District Court for the Northern District of California, the complaint charges Nvidia and Huang with violating provisions of the Securities Exchange Act of 1934. Shareholder Mark Kistenmacher, represented by The Rosen Law Firm, brought the case on behalf of a proposed class of investors who bought or otherwise acquired Nvidia securities between Oct. 9, 2025 and Nov. 8, 2026.
At the heart of the filing are two sets of statements the plaintiff calls materially misleading: Nvidia’s assertion that a review found no evidence its chips were diverted elsewhere, and Huang’s description of the company’s dealings with Singapore-based Megaspeed International as “normal,” The plaintiff alleges those statements omitted Huang’s alleged personal relationship with Alice Huang, a former Megaspeed executive suspected of gathering intelligence for China.
The complaint further contends the defendants withheld national security concerns that could endanger Nvidia’s reputation and future business, and that their statements and omissions artificially inflated the share price throughout the proposed class period.
The court filing says Nvidia shares tumbled 4.27% on Monday to close at $178.67 after the revelations. The plaintiff seeks unspecified compensatory damages for affected investors.
Board Backs Huang Amid Probe
A committee of independent directors, assisted by outside legal counsel, will lead the investigation, Nvidia said. The board added that Huang supports the review and has pledged to cooperate.
The company emphasized that the board currently has no reason to believe US national security or Nvidia’s confidential information was compromised, but said the inquiry will examine all available information. Directors voiced confidence in Huang and his leadership team and promised further updates as appropriate.
Two major newspapers reported allegations that Alice Huang worked for Chinese intelligence, drawing scrutiny to the Nvidia chief’s personal relationship and what it could mean for the company.
Beijing denied the claims Monday. Foreign Ministry spokesperson Guo Jiakun told a news briefing in Beijing that the spy allegations were baseless speculation.
The probe places the leadership of a pivotal player in the global artificial intelligence industry under scrutiny. Nvidia’s chips underpin much of the computing infrastructure used to build and run AI models.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment