Nvidia Accused of Fraud

[rangers]

http://www.xbitlabs.com/news/video/display/20080910112030_Nvidia_Accused_of_Fraud_by_Investor_for_Not_Disclosing_Information_Regarding_High_Failure_Rates.html

dont know what to make of this, what can happen if found guilty

 

[dagger]

http://www.xbitlabs.com/news/video/display/20080910112030_Nvidia_Accused_of_Fraud_by_Investor_for_Not_Disclosing_Information_Regarding_High_Failure_Rates.html

dont know what to make of this, what can happen if found guilty

Lol, another class action. Probably the CEO and CFO getting sacked, and Nvidia having to pay some damages to shareholders. Although proving beyond reasonable doubt that they knew something ahead of time won't be easy.

 

[TheGreatGrapeApe]

It'll be a weird case to try, because it's different saying, we've been working on it since last year, and 'we knew the scope of the problem and it's impact as of point X in time'.

In the post-Enron , SOX-hysteria era, it'll most definitely get a trial and SEC investigation as well.

Funny thing is, the may not have disclosed the information to shareholders (and thus the public [especially tech communities]), but that might have been to shareholder advantage not detriment. If they kept this issue under wraps, sold a ton of potentially faulty GPUs instead of people staying away from them since shortly after launch, and they have little intention of a massive recall (as if it were a defective battery), then it may be a net positive on the bottom line, not negative. Declaring this issue last year when sales were just starting, and having nothing to replace it with, that would've cost much much more than the $200mil write-down sofar.

The tough part of the case will to be prove investor damage as a consequence of this action. Sure investor trust and the rules of the SEC may have been violated, but for the Civil suit, you'd need to prove your loses are greater than had they announced it in Aug 2007. I don't see that as being the case. had they soured their GF8300-8600 desktop and GF8400-8700 mobile launches.

The greater risk is if the SEC finds fault, because then that's potential jail time regardless of the effect on the company/stock/shareholders fi they felt rules were violated on purpose and knowingly.

BTW, I want money or a nice Tesla Rig for this piece of legal advice for the CEO , they misspelled HUANG on the complaint as HUNAG, so he's free from that particular suit (although nVidia is spelled correctly). [:mousemonkey:1]

 

[rangers]

i don't know anything about American law so i can't comment, but can see there in deep ****

 

[TheGreatGrapeApe]

Oh yeah, even if there's little merit to the case it's headaches and legal fees for the next little while, and it's likely to get worse, before it gets better.

If they delay long enough it'll be tried or settled at a point in time no one will care, though it's unlikely anyone but the lawyers will see anything meaningful out of this.

If the G400 is clobbering the R900, do you care if their 4+ year old chips had issues? As an example, anyone still care about the FX era shennanigans?
The time it would've mattered most IMO would've been this time last year, and that window has passed.

 

[rangers]

so ur saying, the nvidia board got it right, just shows how much i know

 

[spathotan]

I dont know about that. ALOT of people current own 8800s and the like. ALOT of people. Not really safe to say "the window has passed".

 

[Heyyou27]

I'm sorry, it's silly that people are getting all worked up about this when tons of people are constantly giving Microsoft a free pass with their strikingly similar but much larger RRoD issue. Don't get me wrong, Nvidia deserves what they have coming, but it's interesting to see how much worse the RRoD was, and how many customers were willing to forgive Microsoft regarding it, even though they knew of the hardware issues before the console launched.

 

[spathotan]

Well the difference here is MS didnt really hide anything, they just screwed people over when warranty/replacement time came.

 

[rangers]

Well the difference here is MS didnt really hide anything, they just screwed people over when warranty/replacement time came.

i dont think you got that right i think they extended the warranty but i have to agree, they didn't hide it and thats the difference between a good company and a bad one, can believe i just said that

 

[spathotan]

Making people who already have warranty coverage pay an additional $100 to fix something that was MS's f'up...I classify that was screwing people over.

 

[TheGreatGrapeApe]

so ur saying, the nvidia board got it right, just shows how much i know

No, I'm not saying that, because it's a dfficult situation to litigate, you have to prove that witholding bad information that would be less detrimental in the future was bad for the shareholder, and not just the customer.

She can argue that the shares were negatively impacted since she bought them, but is the lose of share value due to the actions of the 'cover-up', or one of these many options: market downturn, stiffer competition then (the start of the return of ATi with the HD3K series), poor G92 yields (thus totally unrelated to the GF8600 issue), the PhysX acquisition, RAMBUS lawsuit, or a negative outlook on the future due to stiffer competition now and in the future from AMD and intel? Pretty hard to see the coverup as a negative impact on shareholder value compared to those things. For this type of suit I don't see much merit

If they avoided a catastrophic recall of parts and loss of revenue/profit by hoping to ride out the defects for a minimal charge later (which they seem to be able to do), is that a negative or positive to the shareholders? If the disclosure would've led to much fewer sales and hurt profitability would that have been 'more' in the shareholders interest? I know it's in the interest of the market, and the SEC, but the Civil lawsuit is supposed to be about damages to shareholders due to the actions in the complaint, not punishing nVidia because they lost money for other actions, nor for punishing them for SEC violations, those are other trials.

There's more merit IMO to a customer class-action lawsuit than this one. The success of that would then lead to a shareholder class-action suit, because the impact would be easily attributable to the knowledge and actions of that particular issue. IMO, without a succesful customer class action suit, or recall, or other major cost, then this suit comes well before it's time. Of course if you are worried about weakness and wanna be sure to get paid, then of course you sue before they lose too much money, not after.

 

[rangers]

did they make them pay an additional $100, god i would be pissed at ms if i had a xbox

 

[harrycat88]

ROFLMAO,
It looks like Nvidia got caught this time. I always had problems with their products from day one. I hope they go out of business for all their deception along with all their propaganda campaigns.
Hahaha!

 

[TheGreatGrapeApe]

Making people who already have warranty coverage pay an additional $100 to fix something that was MS's f'up...I classify that was screwing people over.

And that's the difference IMO, that it fell near or within warranty. Had they known all along about the red ring but that the magical date was now instead, then I think we would've seen a very different reaction. And yeah the $100 pretty much guarantees you're gonna get sued.

Also, when M$ is still trying to counter the PS3 and Wii launches, and they know their profits are tied up in future software sales and not past hardware sales, their motivation is also different than nVidias who don't have the same motivation to keep customers happy, they have a slightly more vague 'return customer' motivation, which may be more affected by the benefits of the next generation GPUs than the performance or feelings towards the previous generation's GPUs by their owners.

I don't trust in a company's Altruism, in fact sahreholder's interests go against the customer's interestes in most situations, I trust more in the idea that the negative that will befall them for misdeeds is enough of a motivator to not try and do wrong. Unfortunately there doesn't seem to be the same level of reward for doing comparitive good or nutral though IMO.