facebook rss twitter

NVIDIA faces class action suit over die/packaging crisis

by Scott Bicheno on 10 September 2008, 22:56

Tags: NVIDIA (NASDAQ:NVDA)

Quick Link: HEXUS.net/qapbr

Add to My Vault: x

From bad to worse

A class action law suit has been filed, alleging that NVIDIA knew about its die/packaging problem at least as early as 8th November 2007, although it only officially announced the problem on 2nd July 2008.

The action alleges that anyone who bought NVIDIA stock in that intervening period was not given access to all the facts by NVIDIA and thus was unable to make an informed investment decision.

NVIDIA's share price plummeted by 30 percent after the news was announced. The action states "...all purchasers of NVIDIA common stock during the Class Period [8th November 2007-2nd July 2008] suffered similar injury through their purchase of stock at artificially inflated prices..."

It goes on to state: "Defendants knew that the public documents and statements, issued or disseminated by or in the name of the company, were materially false and misleading," and that Defendants: "were active and culpable participants in the fraudulent scheme alleged herein."

The Defendants are NVIDIA CEO Jen-Hsun Huang, NVIDIA CFO Marvin Burkett and NVIDIA itself. The case seems to essentially be saying that people who bought NVIDIA stock in the period stated were misled and thus should be compensated for losses incurred as a result of the fall in NVIDIA's share price after the 2nd July announcement.

A class action suit entitles anyone who feels they have a valid claim to join the suit and be collectively represented. NVIDIA will have to show that it didn't mislead investors in that time. Could get interesting.

 



HEXUS Forums :: 2 Comments

Login with Forum Account

Don't have an account? Register today!
Can anyone think of any way this could get even worse for Nvidia from here? Because the way things are going it will happen.:rolleyes:

Am I right in thinking that it is Nvidia shareholders suing Nvidia? And that this lawsuit is only going to funnel what is effectively the same people's money into the pocket's of lawyers? TBH I hope the shareholders lose, if only for the irony of the share price dropping yet more as a result of their actions.:)
This makes sense really but probably will mean even less support for the affected customers :(