Nvidia shareholders are suing the company and Huang over the alleged Chinese spying scandal.
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Nvidia shareholders have filed a class-action lawsuit against the company and CEO Jensen Huang. They are accused of fraud: According to the lawsuit, reviewed by Reuters, Nvidia misled shareholders about Jensen Huang's alleged affair with Alice Huang (they share the same name), the former head of Singapore's Mega Speed, which US intelligence agencies see as an agent of Chinese intelligence. In addition, according to the plaintiffs, the company hid the risks associated with this story to US national security, which could damage the reputation and business prospects of the chip maker.
We discussed here in detail the essence of the scandal and its consequences. US intelligence believes that Alice Huang could have worked for Beijing and some of the chips purchased by Mega Speed arrived in China illegally. Jensen Huang admitted to employee adultery, and Nvidia's board of directors announced an independent investigation. The company emphasizes that there is currently no reason to believe that US national security or its secrets have been compromised.
Nvidia shares at the end of trading on November 9 were down 4.3%, the value fell by about $190 billion, Reuters calculated. The incident calls into question Huang's future at the helm of Nvidia, although his resignation does not yet appear to be a foregone conclusion. Both the industry and investors are against it, and so far the CEO seems "too big to fire," the FT wrote. Filing class action lawsuits against public companies after unexpected falls in stock prices is common practice.