First class-action filed
Rosen Law Firm has filed a class-action lawsuit against NVIDIA and CEO Jensen Huang after he confirmed a romantic relationship with Alice Huang, whom U.S. intelligence services allege is a Chinese honeypot. The suit claims NVIDIA and Huang failed to disclose the relationship, misled investors when asked about it, and caused a drop in the company's share price.
Other firms launch investigations
Several other law firms, including Schall, Brown & Schwartz, Levi & Korsinsky, Frank R. Cruz, and Bronstein, Gewritz & Grossman, have announced their own investigations on similar grounds. Their statements cite pre-market drops of 5.5% to 5.88% and an intra-day decline of 8.8% in NVIDIA shares. Frank R. Cruz's office says it is interested in shareholders with $50,000 in losses.
NVIDIA's response
NVIDIA downplayed Huang's relationship with Alice Huang, saying: "Megaspeed has been no different than many other regional cloud customers. Meetings with customers are part of a CEO's job; Jensen talks with thousands of customer executives every year." The development comes amid ongoing scrutiny of the company's chip shipments to China and export controls.
What it means for investors
Class-action suits allow shareholders to seek compensation under securities law when they believe they were misled. Such cases typically require no upfront fees, with law firms taking a cut of any settlement or damages. The proceedings could add pressure on NVIDIA's share price and management.
