The key facts
- The class action lawsuit was filed in the federal court in San Jose by shareholder Mark Kistenmacher through The Rosen Law Firm
- The plaintiffs demand compensation for the period of share ownership from October 9, 2025 to November 8, 2026
- Nvidia shares lost almost 7.9% since Friday's close, and the board of directors began an independent investigation
The investors' lawsuit and its grounds
A group of Nvidia shareholders has filed a class action lawsuit against the company and its CEO Jensen Huang, accusing the leadership of concealing information capable of affecting the value of the securities. According to The Telegraph, citing case materials, the lawsuit was filed with the federal court in San Jose, California; the initiator was shareholder Mark Kistenmacher, whose interests are represented by the law firm The Rosen Law Firm.
The essence of the claims
According to the plaintiffs, the company and its chief misled shareholders by concealing information about Huang's close relationship with Alice Huan, a former employee of the Singapore-based company Megaspeed, whom American intelligence services suspect of working for Chinese intelligence. Investors believe the situation created risks for US national security, Nvidia's reputation and its business, and they demand compensation for financial damage. The claims cover investors who purchased shares from October 9, 2025 to November 8, 2026.
Details of the lawsuit according to Anadolu
The Anadolu Agency specifies, that the lawsuit was filed on Monday in the US District Court for the Northern District of California and is based on alleged violations of the Securities Exchange Act of 1934. The plaintiff asserts that Nvidia's statements that the review found no signs of chip leakage, and Huang's description of his contacts with the Singapore-based Megaspeed International as 'normal,' were substantially misleading, since they omitted the company chief's personal relationship with Alice Huan. According to the lawsuit, these omissions concealed national security risks and artificially inflated the share price; the amount of compensation sought was not named.
Share decline and the board of directors' investigation
Against the backdrop of the lawsuit, Nvidia shares continued to fall: on Tuesday they traded at $171.55, down 4% from Monday's close of $178.67. The day before, the shares had already dropped 4.27%, and the cumulative decline since Friday's close reached almost 7.9%. Earlier Life.ru reported, that amid the spy scandal, investors began to fear Jensen Huang's resignation, and the board of directors' investigation heightened market concerns, since the company holds key positions in the production of processors for artificial intelligence.
The board of directors' position
The lawsuit was preceded by Nvidia's Sunday announcement: independent directors, with the support of outside lawyers, began an investigation into reports that Huang had become the target of a foreign intelligence operation. The board stated that it has no reason to believe that national security or Nvidia's confidential information were compromised, but it will examine all available information. According to the agency, Huang supports the review and will cooperate, and the board expressed confidence in him and his team.
