// TECHCRUNCH — FINANZA
The race is on to sue Nvidia
Nvidia’s stock slid more than 4% on Monday, the first trading day after its board said it would investigate CEO Jensen Huang over his relationship with Alice Huang, an executive U.S. intelligence believes was spying for China.
Securities lawyers were already moving. Several firms, including Schall, Brown & Schwartz, Levi & Korsinsky, Bronstein, Gewirtz & Grossman, and The Law Offices of Frank R. Cruz, announced investigations Monday into whether Nvidia made false or misleading statements or failed to disclose information that’s pertinent to investors. Robert Bartlett, a Stanford Law professor and securities law expert, expects them to have plenty of company.
“I would definitely wager that there’ll be a filing,” Bartlett said in an interview Monday morning, adding that he wouldn’t be surprised if a case had been filed by the end of day. Plaintiffs’ lawyers have good reasons to be first in line; under federal securities law, the first complaint triggers a public notice, and investors then have 60 days to ask the court to be named lead plaintiff. A firm that files early gets a head start on signing up investors with large losses, as well as on shaping the story of the case. Nvidia is headquartered in Santa Clara, and indeed, that’s where one of the first cases surfaced Monday afternoon.
Rosen Law Firm, a New York-based plaintiffs’ firm that specializes in securities class actions, filed the case Monday in federal court in the Northern District of California. (The firm was lead counsel in a $250 million settlement with Alibaba and ranks among the most active filers of such cases.) The suit was brought on behalf of Mark Kistenmacher, who’s described as an individual investor. According to the complaint, Kistenmacher made seven purchases totaling roughly $20,500 between February and November of this year. The proposed class covers anyone who bought Nvidia securities between Oct. 9, 2025, and Nov. 8, 2026, and the suit names both Nvidia and Huang.
The complaint accuses them of misleading investors about Huang’s ties to Megaspeed, the Singapore-based data center outfit where Alice Huang was considered a top executive. It points to three statements: Nvidia spokesperson John Rizzo’s claim that Huang’s interactions with Alice Huang were “not unusual or unexpected,” the company’s claim that it found “no evidence of diversion” of its chips, and Jensen Huang’s Oct. 30 comment to Bloomberg that Nvidia’s dealings with Megaspeed were “normal and not unusual.”
All three were false or misleading, the suit says, because Huang was having an affair with Alice Huang. Kistenmacher is asking for unspecified damages, interest and attorneys’ fees, and he wants a jury trial.
While much remains unknown, the legal theory here doesn’t depend on anything the board’s investigation turns up about Huang’s private life. When The New York Times first reported on Huang’s ties to Alice Huang last month, Rizzo really did tell the Times that the relationship was “not unusual or unexpected.” Rizzo separately told another outlet, The Hill, that “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.”
Since then, Huang has acknowledged to the board that the relationship was intimate. Meanwhile, The Times reports that U.S. intelligence had been monitoring Alice Huang for more than a year.
From a securities perspective, Bartlett said, the company’s earlier statement was “clearly a misleading statement.” And because Huang is CEO, Bartlett said, “his knowledge gets imputed to the company.” In other words, Nvidia is treated as having known what its chief executive knew.
The Kistenmacher complaint makes the same argument.