A shareholder at Nvidia, an American technology company has filed a “Shareholder derivative lawsuit” against Nvidia’s officers. The plaintiff alleged that the officers have mismanaged the company and caused Nvidia to make false claims that the corporation will be unaffected by the volatility of the cryptocurrency market, according to a media outlet’s report.
Yuju Yang Files Lawsuit Against Nvidia Officers
Per the report, Yuju Yang, the owner of Nvidia stock has filed a shareholder derivative lawsuit against Nvidia officers. This type of lawsuit is usually filed by a shareholder on behalf of the entire company. In this case, only the corporate officers are being sued for mismanaging the company’s funds.
Nvidia, on the other hand, is reputably known for its design of graphics processing units (GPUs) which are used for gaming and mining cryptocurrencies. The plaintiff stated that the officers had led people to believe that the volatility of these digital assets will not affect the company’s finances.
According to the lawsuit:
The Individual Defendants made and/or caused the Company to make false and misleading statements indicating that the Company could withstand the volatility of the cryptocurrency market, specifically through their computer gaming customer demand, and effectively navigate the cryptocurrency market.
Court to Assume the Accused Acted in the Company’s Best Interest
Further reports reveal that because of the “business judgment rule”, the court will assume that the officers’ actions were in the best interest of the company. However, this has to be proven otherwise in court. Thus, Yuju Yang will argue that the officers violated their duties which had resulted in losses for the company. Alternatively, the defendants will claim that they had made informed decisions on behalf of Nvidia.
Asides that, the plaintiff also alleged that during the hike in stock price influenced by crypto-related sales, the officers had sold their shares in the company. They had also forced the company to buy back these shares at prices which were inflated and for which they were aware of. The plaintiff also pointed out that there are currently two pending securities fraud lawsuits involving these officers.
Lawsuit Could Stem From Low-Level Mining Activities
Assumptions can be made that these lawsuits stemmed from the low-level mining activities of recent. Several high-cost miners have packed up due to the less profit these activities are yielding. This and many more can be attributed to Bitcoin’s price which has declined over 80 percent from its all-time high in December 2017.
On November 16, BTCNN informed of a decrease in Nvidia’s revenue as a result of low interest in cryptocurrency mining. Bitman’s challenges were also reported on January 2. Here, plans were made to lay off some staffs, and they wouldn’t be the first given that others in the industry have done the same.