Nvidia and its chief executive Jensen Huang have been sued in the United States over allegations that the company misled shareholders by failing to disclose Huang’s alleged relationship with a woman suspected of having links to Chinese intelligence.
The proposed class-action lawsuit was filed on Monday in federal court in San Jose, California. According to the complaint, Nvidia and Huang concealed details of his alleged affair with Alice Huang, a former executive at Singapore-based Megaspeed who is not related to the Nvidia chief.
The plaintiffs allege that the undisclosed relationship raised national security concerns and potentially threatened Nvidia’s reputation and business prospects. They accuse the company and its CEO of misleading investors by withholding information about the matter.
The New York Times reported last month that US authorities had concluded Alice Huang was a Chinese intelligence asset. The allegations have also drawn attention from US lawmakers, who have sought information from Nvidia over the reported links.
Jensen Huang previously told Nvidia employees that he had been unfaithful to his wife, but did not provide details about the alleged relationship.
Nvidia announced an internal investigation into the matter on Sunday. The company did not immediately respond to Reuters’ request for comment on the lawsuit.
The legal action came after Nvidia shares fell 4.3 per cent on Monday, wiping approximately $190 billion off the company’s market capitalisation. The complaint was filed five minutes after the US stock market closed.
The lawsuit was brought by Nvidia shareholders led by Mark Kistenmacher, who are seeking unspecified damages from the company and Huang. Shareholder lawsuits following significant stock price declines are not uncommon.
The allegations in the complaint have not been established in court, and the lawsuit does not amount to a finding of wrongdoing by Nvidia or its chief executive.
