Nov 9 (Reuters) – Nvidia and Chief Executive Jensen Huang were sued on Monday in a proposed class action accusing them of defrauding shareholders by concealing Huang’s ties with a suspected Chinese spy.
Nvidia did not immediately respond to a request for comment. He co-founded Nvidia, and has led the Santa Clara, California-based company as it became the world’s most valuable chipmaker and made him one of the world’s most prominent symbols of the artificial intelligence boom. The lawsuit was filed five minutes after the US stock market closed.
Its shares closed down 4.3% on Monday, reducing Nvidia’s market capitalization by approximately $190 billion.
California , the defendants misled shareholders about Huang’s alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him, and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects, according to a complaint filed in federal court in San Jose. Jensen Huang told Nvidia’s employees he had been unfaithful to his wife, without disclosing details of the alleged relationship. Nvidia announced a probe into the matter on Sunday.
It is common for shareholders to sue companies after unexpected share price declines. Nvidia shareholders led by Mark Kistenmacher are seeking unspecified damages from the defendants.
